Bitcoin circles $20K pre CPI amid warning Fed risks ‘blowing up’ economy
Bitcoin (BTC) rebounded from overnight lows on July 13 as markets nervously waited for United States inflation data.
Countdown to “highly elevated” inflation reveal
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing from $19,250 to $19,900 at the time of writing, up 3.3% on the day.
With three hours to go until the release of Consumer Price Index (CPI) data for June, crypto markets showed little sign of advance volatility.
Previously, the U.S. government had warned that the CPI figures were expected to be “highly elevated,” with unofficial projections from other sources indicating a year-on-year inflation increase of nearly 9%.
NEW #inflation record high on the year!At least that's what I'm now forecasting for June CPI, released in 5 daysI forecast 8.8% year over year, breaking the previous 41 year record of 8.6% set last monthMonth over month this would be 1.2% — TheHappyHawaiian (@ThHappyHawaiian) July 9, 2022
“CPI coming out at 8.8% today. Watch. I’ve got a strong feeling this is the number,” popular crypto YouTuber Ben Armstrong agreed.
Biding its time meanwhile was the U.S. dollar index (DXY), which lingered at just above 108 after a corrective move from fresh twenty-year highs.
Analyzing the potential for the Federal Reserve to continue interest rate hikes to tame inflation, meanwhile, one analyst argued that there was already little, if any, room for maneuver.
“We are at the point where the fed would usually halt rate hikes and begin easing again,” Reddit and Twitter user TheHappyHawaiian explained.
“As they gear up for 75bp in a couple weeks, they would be knowingly blowing up the system.”
An accompanying "Fed Pivot Indicator" chart showed Fed rate direction change over the past thirty-three years, and suggested that hikes had already hit their maximum allowed levels.
Trader highlights $22,000 importance
Altcoins were somewhat predictably in lockstep with BTC ahead of the inflation numbers.
Ether (ETH), after losing 8% the day prior, circled $1,075 at the time of writing, still down 6.3% over the past seven days.
Other tokens in the top ten cryptocurrencies by market cap were static on daily timeframes.
For Cointelegraph contributor Michaël van de Poppe, however, there was still reason to believe that selling pressure was circumstantial rather than a longer-term trend.
“Yes, the markets should have been correcting, but right now, the valuations of crypto and Bitcoin are way lower than what they should be, due to forced selling from 3AC, $LUNA, and more,” he argued.
“That's why a break through $22K is going to accelerate the price to $30K as well.”
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