Bitcoin slips below $19,000 after US inflation data

For June, the pace of growth in the U.S. consumer price index ускорились from May’s 8.6% to 9.1% year over year. Against this backdrop, bitcoin briefly traded below $19,000.

The gauge exceeded expectations (8.8%). On a monthly basis, the rise was 1.3% versus a forecast of 1.1%. The inflation rate was the highest since November 1981.

At the time of writing, the first cryptocurrency is trading above $19,330. Over the past 24 hours the asset has fallen 3% (CoinGecko).

Over the last 24 hours, Ethereum fell 3.3%. At the time of writing, the coin sits around $1,050.

Following the leaders, all top-10 crypto assets by market capitalization moved into the red.

Total market capitalization of the cryptocurrency market fell by 2.6%. It currently stands at $897.5 billion.

According to Coinglass, over the last hour futures positions were liquidated worth $12.7 million, over the day — $242.3 million.

U.S. stock indices also reacted negatively to the news: the S&P 500 fell 0.75%, the Nasdaq Composite — 0.43%. The Dow Jones Industrial Average lost 1.02%.

In March 2022 the U.S. Federal Reserve (the Fed) for the first time since December 2018 raised its policy rate by 25 basis points to 0.25-0.5%. Back then, bitcoin and the S&P 500 posted gains.

In May, the Fed raised the target range of the policy rate to 0.75–1% per year, which surprised markets. In that context the price of the leading cryptocurrency briefly breached the $40,000 level, but on the same day fell below $36,000, which marked the start of a protracted correction.

In June the Fed sharply raised the policy rate — by 75 basis points, to 1.5-1.75%. Bitcoin, which previously fell below the $30,000 level on news of accelerating inflation, rebounded.

Back in the second quarter of 2022, digital gold was the worst performer in 11 years, according to Coinglass. The asset fell 56.2%, from $45,000 to $19,884.

According to Galaxy Digital chief Mike Novogratz, a recession in the crypto market will last for about 18 more months, with the sector seeing early signs of recovery once the Federal Reserve eases monetary policy.

The investor Michael Burry, who warned of the 2007 housing crisis, predicted further declines in bitcoin’s price.

For commentary on how the Fed’s rate moves affect bitcoin, read the ForkLog cards.

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