Bitcoin (BTC) experienced sudden volatility on September 13 as macroeconomic data from the US showed inflation exceeding expectations.
BTC/USD 1-hour chart. Source: TradingView
Fuel and accommodation boost CPI above target in August
Data from Cointelegraph Markets Pro and TradingView tracked BTC price action as it threatened a fresh loss of the $26,000 mark.
The consumer price index (CPI) for August was 3.7% year-on-year – 0.1% higher than forecast.
“The gasoline index was the largest contributor to the monthly increase of all items, accounting for more than half of the increase,” said an official press release from the US Bureau of Labor Statistics.
“Contributing to the monthly increase in August was the continued improvement in the Protection Index, which rose for the 40th consecutive month.”
Chart of 12-month change in US CPI in percent. Source: US Bureau of Labor Statistics
Previously, crypto market participants had warned that a “hot” CPI reading would put pressure on the market as it would mean inflation remains more stubborn than hoped. This could in turn have an impact on how restrictive economic policy remains in the future.
CPI in 1 hour.
Tip: Do not open positions based on news announcements and wait 30 minutes after the data is published before starting to trade.
Back: 3.2%
East: 3.6%
– 3.5% or less: $BTC is likely to reach the liquidity zone at $26,800.
– 3.7% or higher: Asian pump likely to decline.
– CrypNuevo (@CrypNuevo) September 13, 2023
“I think we’ll see a 4% increase in the next CPI if gas prices rise so quickly,” popular trader CrypNuevo told subscribers on X (formerly Twitter) as part of a response.
“Inflation is still a problem, and a big problem in this second half of the year.”
The consumer price index was already forecast to beat its July reading, coming in at 3.6% in August compared to 3.2% last year.
Bitcoin bid liquidity is $25,000 and below
Ahead of the release, Keith Alan, co-founder of on-chain monitoring resource Material Indicators, was optimistic that BTC price momentum will continue this week.
Related: GBTC ‘discount’ hits lowest level since 2021 despite BTC price at 3-month low
“The strength of BTC momentum has weakened somewhat since yesterday, but so far it is still strong enough to hold most of what was recaptured after the bounce,” reads part of an X post.
Alan reiterated that “a lot of technical resistance” remains above the current spot price range in the form of multiple daily moving averages.
With the open on Wall Street still to come, there has been volatility as BTC/USD has failed to see a clear trend at the time of writing.
An attached snapshot of the BTC/USDT order book on the largest global exchange Binance showed only modest liquidity around the spot price, with further bids parked at $25,000.
BTC/USD order book data for Binance. Source: Material Indicators/X
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
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