Traders are very aware of the US inflation data.
New red day for the cryptocurrency market, with Bitcoin at a one-week low, near the $19,000 zone, and Ethereum touching $1,000. The total capitalization has dropped around 100,000 million dollars, to 870,000 million, from 970,000 a few days ago, when the main market currencies experienced a series of bullish days that led digital currencies to rises led by Bitcoin to the $22,000.
However, the market has turned around and a break of $19,500 for Bitcoin may signal that more pain is to come in the digital currency, says Craig Erlam, an analyst at Oanda. Experts point to the lows of June, when Bitcoin dipped below $18,000, as the level to watch for possible falls.
Events Unfolded
Amid the bearish price action, more than 62,000 traders were liquidated in the cryptocurrency market, data from CoinGlass suggests. In the same period, more than 180 million dollars have been settled. Ethereum leads the liquidations with almost 62 million dollars liquidated in the last 24 hours, followed by Bitcoin with 59.95 million dollars and Solana with 3.42 million dollars in the same period.
Total cryptocurrency trading volume has fallen to just over $50 billion, down 86% from its all-time high of nearly $367.6 billion recorded on May 20, 2021, according to CoinMarketCap analytics data. The long-term bearish movement of the Bitcoin price has also forced many miners to unload their holdings to cover operating costs.
Analytic Research Reports Explain the Bearish Action
The main drivers of the bearish action are plummeting cryptocurrency trading volumes, selling pressure from miners, and heightened expectations of another rate hike by the Federal Reserve. Investors will get more clarity on this point after the release of US inflation data on Wednesday. A soft reading on this indicator could give Bitcoin some lift along with stocks, at least temporarily. The line in the sand is probably just below the June lows around $18,500, says Oanda analyst Jeffrey Halley.
The report is likely to show consumer inflation accelerating to 8.8% year-on-year, the fastest pace since 1981 or nearly 41 years. However, the core inflation reading could slow to 5.7%.
“The most important aspect of this data will be how the Fed will perceive this reading and, secondly, how will market players translate this number. As for the Fed, it is very possible that it will continue with its aggressive monetary policy and that a figure strong will only increase the odds of a 75 basis point rate hike,” says Naeem Aslam, head of research at Avatrade.
In regards to inflation, Jamie Dimon, president of JP Morgan Chase, recently said in an interview that the United States is likely to enter a recession before the end of the year, since it is still unknown how much interest rates will continue to rise.
Dimon pointed out that if inflation is close to peaking and then prices could start to fall, but stresses that it is difficult to make forecasts.
By Audy Castaneda
