Cryptos drop on hot US CPI print, Ethereum completes Merge – Cryptocurrency News
Last week, Bitcoin had been constantly gaining ground and reclaimed the $22,000 mark. This advance was attributed to the softening US dollar and the mild rally in equity markets ahead of Tuesday’s key inflation report, which was anticipated to exhibit signs of inflation decelerating in the US. Nevertheless, the latest US CPI came out at 8.3% on an annual basis above expectations of 8.1%, indicating that inflationary pressures are broadening in the US and spurring bets that the Fed could proceed with a more aggressive monetary approach.
This latest development delivered a significant blow to investor sentiment, triggering a sell-off in stock markets, which quickly spilled over to the crypto space. As a result, Bitcoin suffered its biggest drop in three months, falling nearly 10% and reinforcing once again the belief that cryptocurrencies continue to closely track the stock market.
Currently, the global cryptocurrency market capitalization remains well below the $1 trillion psychological mark, while the famous Bitcoin Fear and Greed index has entered deeper into the ‘extreme fear’ territory. Is the 'crypto winter' officially here?Merge fails to rescue Ethereum
After years of delays, Ethereum’s largest upgrade since 2015 called ‘Merge’ was successfully completed on Thursday, giving a slight boost to the digital token. The new network design is expected to reduce the carbon footprint from the coin’s production, which significantly enhances its growth and sustainability prospects. However, Ethereum surrendered much of its latest gains, pressured by the negative macroeconomic environment and some profit taking.
Crypto traders are usually using a ‘buy the rumour’ and ‘sell the event’ strategy and Merge proved to be another example of that theme. Specifically, investors and traders built up their long positions ahead of the event in order to take profits as soon as the upgrade was completed. This strategy entailed huge risks though as there was a significant likelihood that the upgrade might not be smooth, causing the coin price to collapse in the near-term.Where is Bitcoin price heading?
Taking a technical look, Bitcoin has been experiencing a steady decline after the hotter-than-expected US CPI inflation report terrorised the market participants on Tuesday.
If selling pressures persist, the price could decline towards the recent low of $18,750. Sliding beneath that floor, the spotlight would turn to the 2022 low of $17,588.
On the flipside, bullish actions could propel the king of cryptocurrencies towards its recent peak of $22,780. Even higher, upside moves could stop at the August high of $25,200
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