Thursday’s crypto market was hit hard as traders braced for a wave of inflation data. The U.S. Bureau of Labor Statistics is set to drop the latest Consumer Price Index (CPI) figures at 8:30 AM Eastern Time. And the outcome? It could turn the tide on Federal Reserve policy and market outlook. Investors are spooked, and their wallets are showing it.
Bitcoin Tanks, Ethereum Follows Suit
Bitcoin (BTC), the heavyweight of crypto, dropped 2.5%, landing at $60,700. That wiped out all of its gains from last week. Ethereum (ETH) wasn’t far behind, dipping 2.3% to $2,375. Yet somehow, it’s still holding onto a slim 1% gain for the week, according to CoinGecko’s data.
Alex Kuptsikevich, a senior analyst from FxPro, says macro trends are driving the plunge. “The rising dollar spooked crypto,” he told Decrypt. With bonds looking sweeter by the minute, it’s no surprise institutional investors are stepping back from Bitcoin. The total crypto market value nosedived by 3.4%, down to $2.2 trillion.
In contrast, traditional markets are partying. The S&P 500 is chilling at record highs while the Crypto Fear & Greed Index has dropped into the “fear” zone at 39. Meanwhile, the stock market remains firmly in “greed” at 72.
Support Levels and Supreme Court Moves
Bitcoin’s now in a dangerous dance with key support levels. Burak Kesmeci, a CryptoQuant contributor, said that the average cost of short-term Bitcoin holders is in play. “A close above $64,500 would give bulls some strength,” he said. But a slip below $61,600 could seriously test Bitcoin holders’ patience.
The pressure doesn’t stop there. Earlier this week, the U.S. Supreme Court declined to hear an appeal challenging the government’s plan to sell 69,000 seized Bitcoin. Some thought this could rattle the market, but analyst Valentin Fournier at BRN says the sell pressure might’ve already been baked in.
Fournier added that “outflows signal waning institutional support as bullish momentum fades.”
All eyes now turn to the CPI data, where projections expect a 0.1% rise in September, cooling off from August’s 0.2%.
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