Bitcoin and Ethereum have dropped to levels not seen since last week as inflation-related market concerns intensify.
Bitcoin (BTC) avoided fresh local lows on July 12 as the White House warned of “very significant” inflation.
The White House issues a warning ahead of a “decisive day”
Prior to the opening of Wall Street, TradingView data indicated that BTC/USD was reaching $19,500, a decline of nearly 4 percent on the day.
After failing to maintain support at $20,300, the pair appeared to react negatively to White House press secretary Karine Jean-inflation Pierre’s outlook remarks.
The May increase in the Consumer Price Index (CPI) to fresh forty-year highs had already primed the markets for June results that exceeded expectations.
She told reporters at a press briefing on July 11: “On Wednesday, we will receive new CPI inflation statistics, and we expect the headline number, which includes gas and food, to be extremely higher, mostly because gas prices were so high in June.”
Bitcoin’s decline to $19,520 reached its lowest level in a week.
He noted that the worst of the reaction should occur prior to the release of CPI data, but that the U.S. dollar index (DXY), which is at its highest level in two decades, remained of importance.
“Saying’sell the rumour, buy the news’ appears to imply something,” the message added.
“Charts to monitor tomorrow: $DXY and government bond yields, plus Brent oil reaction.”
Particularly strong inflation risks losses across risk assets due to the related danger of central bank monetary tightening to tame it, as is already evident in the U.S. DXY tends to make decisive gains in times of financial downturn, according to data.
Psst… the dollar $DXY is telling us that inflation hasn't peaked.
— Caleb Franzen (@CalebFranzen) July 11, 2022
At the time of writing, DXY was trading at 108.47, having surged further into the new week to hit its highest levels since October 2002.
“Not interested in longs moving into tomorrow’s CPI, personally hoping for a recovery in the $20,3K and/or $19,3-19.5K range,” Van de Poppe continued regarding possible trading strategies for the impending volatility.
The price of Ethereum falls 8 percent
On altcoins, daily losses averaged over 5 percent, but Ether (ETH) led the top ten cryptocurrencies by market capitalization with a 24-hour loss of 8 percent.
Near the time of writing, ETH/USD was trading at $1,060, approaching daily support levels in place since mid-June.
Popular trader and analyst Rekt Capital stated at the start of the week, “If things remain unchanged and altcoins continue to struggle to breach major resistances, altcoins may need to face an additional 30 percent decline.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.