Bitcoin approaches $20,000 prior to CPI as the Fed warns the economy could ‘blow apart’

In a few hours, “very high” CPI statistics will be released, and one argument implies that there is no more room for Fed rate hikes.

Bitcoin (BTC) rose from its overnight lows on July 13 as investors anxiously awaited U.S. inflation data.

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Countdown to “very high” inflation disclosure

At the time of writing, TradingView data indicated that BTC/USD rose from $19,250 to $19,900, an increase of 3.3% on the day.

Three hours before the release of June’s Consumer Price Index (CPI) data, crypto markets exhibited little prior volatility.

Previously, the U.S. government had cautioned that the CPI data were projected to be “very high,” with unofficial forecasts from other sources predicting a nearly 9 percent year-over-year inflation increase.

“Today’s CPI report is 8.8 percent. Watch. I have a strong intuition that this is the number,” concurred prominent crypto YouTuber Ben Armstrong.

In the meantime, the U.S. dollar index (DXY) hovered slightly around 108 following a pullback from twenty-year highs.

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One economist, analysing the Federal Reserve’s ability to continue raising interest rates to combat inflation, suggested that the central bank has little, if any, room for manoeuvre.

TheHappyHawaiian explained on Reddit and Twitter, “We are at the stage when the Fed would typically suspend rate hikes and resume easing.”

As they prepare for 75bp in a few weeks, they will knowingly destroy the system.

An accompanying “Fed Pivot Indicator” chart depicted Fed rate direction shift over the past thirty-three years, indicating that rate hikes had already reached their maximum permissible level.

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Trader illustrates the significance of $22,000

Ahead of the inflation data, altcoins followed BTC in a relatively predictable fashion.

At the time of writing, the price of Ether (ETH) was $1,075 after falling 8% the previous day and 6.3 percent over the preceding week.

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Other cryptocurrencies in the top ten by market capitalization were static on daily timescales.

“Yes, the markets should have been correcting, but owing to forced selling from 3AC, $LUNA, and others, the current values of crypto and Bitcoin are far lower than they should be,” he claimed.

“Therefore, a break through $22,000 will also push the price to $30,000.”


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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