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Bitcoin slips below $27k as U.S. September CPI rises 0.4%

TL;DR

  • Bitcoin is on a nosedive following the release of September’s CPI data.
  • In September, the Consumer Price Index (CPI) showed inflation rising 0.4% over the previous month and 3.7% over the year, a slowdown from August’s 0.6% month-over-month increase and in line with August’s 3.7% annual rise.
  • Crypto markets, as well as traditional markets, have reacted negatively to the CPI data.

Bitcoin fell below $27,000 for the fifth straight day, extending its losing streak to five days. After beginning to fall on Sunday, the crypto sank 2% on Thursday to roughly $26,600. Equities fell after rising earlier in the week, while gold rose slightly.

The Consumer Price Index (CPI) increased 0.4% in September, compared to 0.3% expected by economists and 0.6% the previous month. In September, the CPI grew 3.7% year on year, compared to predictions of 3.6% and 3.7% in August.

Bitcoin leads the market crash ahead of the weekend effect

The core CPI, which excludes food and energy expenses and has been slower to fall than the headline rate, climbed 0.3% in September, compared to predictions of 0.3% and 0.3% the previous month. Year on year, core CPI was 4.1%, compared to 4.1% expected and 4.3% in August.

The shelter index contributed the most to the monthly increase in core inflation, rising 0.6% month over month, above August’s 0.4% monthly gain. The index increased 7.2% year on year, down from 7.3% year on year in August.

On a monthly basis, the rent and owners’ equivalent indexes increased by 0.5% and 0.6%, respectively. The equivalent rent for owners is the hypothetical rent that a homeowner would pay for an identical residence.

Following the report, the price of bitcoin (BTC) fell further, falling 1.2% to $26,770.

The minutes of the most recent meeting of the United States Federal Reserve’s Federal Open Market Committee (FOMC), released yesterday afternoon, revealed policymakers were broadly in agreement that rates would likely need to be raised one more time before the monetary tightening cycle ended.

According to the CME’s FedWatch, rate traders currently predict a 10% likelihood of a rate hike at the Fed’s November meeting, but the odds rise to 30% by year’s end.

Investors were eagerly awaiting critical economic statistics, which would provide clues as to where the economy is heading. Meanwhile, the Labor Department issued the most recent PPI statistics, another key indicator of inflation, on Wednesday.

The PPI report revealed that inflation, while somewhat lower than in August, was higher than expected. It has alarmed investors since it opens the door for the Fed to announce additional rate hikes at their next meetings.

Meanwhile, the Federal Open Market Committee (FOMC) met on October 11 to evaluate rising US PPI data, which raised concerns about risky assets. Most Fed officials expect another year-end rate hike to keep interest rates high until annual inflation stabilizes at 2%.

Following the release of the CPI statistics, the US Dollar Index increased 0.21% to 105.790 on Thursday. At the same time, the US 10-year Bond Yield increased by 0.17% to 4.601.

US CPI data cause a stir in the market

This week, the crypto market -especially Bitcoin has battled to maintain a bullish trend. Meanwhile, the market has continued its downward trend following the announcement of the CPI data, showing that investors’ risk-bet appetite is being reduced by the lingering fears. 

Notably, the crypto market fear and greed index was around 40, indicating “fear” among market players. Following the release of the data, US equities remained relatively quiet in early trade. Treasury yields increased by around 7 basis points to around 4.6%.

Inflation has stayed much over the Federal Reserve’s target of 2%. A labor market that, while easing in some regions, remains tight, along with an upward surprise in wholesale inflation statistics, suggests that the Federal Reserve may continue to hike interest rates. 

As of this writing, the global crypto market cap today is $1.08 Trillion, a -1.29% change in the last 24 hours and a 12.54% change one year ago. As of today, the Bitcoin market cap is at $523 Billion, representing a Bitcoin dominance of 48.34%. 

Meanwhile, Stablecoins’ market cap is at $123 Billion and has an 11.37% share of the total crypto market cap.

Bitcoin, the largest crypto by market capitalization, led the market’s losses. Bitcoin’s price fell to $ 26,700 (BTC / USD) with a current market cap of $ 545.25B. Bitcoin is down 1.46% in the last 24 hours with a circulating supply of 19.51M.

At the time of writing, the Ethereum price was down 1.50% to $1,548.35, with volume down 11.96% to $5.05 billion. Simultaneously, the XRP price fell 1.67% to $0.4791, while its one-day volume increased 4.92% to $799.02 million.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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