BTC goes below 30k after US inflation rate reports

[tomahawk9]

Bitcoin and the crypto market went down today after reports came out that the US inflation rate hit 40-year high in May

US Inflation Quickens to 40-Year High

BTC price chart. Source: bitstamp

"Despite hopes that the worst of the inflationary period was over, May's CPI print came in at 1% month-on-month and 8.6% year-on-year — a return to levels not seen since 1981. Estimates had only forecast around half as much of a jump for last month. Bitcoin immediately felt the pinch as the market appeared to balk at the prospect of further monetary tightening to tame increasingly aggressive price increases."

Thoughts?

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[franky1]

bitcoins price is not the lowest its been in the last 14 days. so id say.. calm down..
and also zoom out of the hourly/minute charts..

no one can judge overall market sentiment of reactions to long term inflation results as being the cause of temporary minute/hourly price changes..

so dont be checking the per minute/hourly level charts trying to assign reason for all small movements and dont get emotional/concerned with the per minute/hourly movement

instead
look at the the quarterly charts and assign a bottom amount it ever reached. and then if it reaches the quarterly bottom again.. . then try to find reason.

[jackg]

This probably didn't have much of an effect on bitcoin's price and is just two things happening at once.

I think US monetary policy has been speculated to be maintaining an inflation of about 8% so this could be that just catching up. Surely inflation dollars being reported as high would be a good thing for crypto too as there's extra cash moving through the economy.

[teosanru]

Technically btc should go up with news linked to inflations in fiat markets because logically Bitcoin's point becomes stronger with every bit of depriciation in dollar. I think this was just a market reaction to the news immediately overall this will should give green signs in bitcoin as this is an absolutely positive news. If anyone has another point how these can be connected please do tell.

[LegendaryK]

Inflation and the U.S.A baby boomers beginning retirement is causing a run from all speculative investments into more stable investments,
such as cash, bonds, gold & silver.

This is a natural progression of the aging demographics when people that retire switch from speculation to more investments that are less likely to lose against inflation. For others, due to the inflation, they need the fiat to survive causing the sell offs.
Since crypto & stocks are sold to buy food & energy , expect the sell off to get much worse for the foreseeable future.

* Some would say crypto can be used instead of cash, while true, Merchants and Utilities would immediately sell for fiat , as they can't afford holding crypto that can drop large % in a single day, which still creates a sell off.  One upcoming concern for btc holders is how long Tesla car company will hold their btc, as their sell off would definitely impact the BTC market price. *

    

[Upgrade00]

Few weeks ago, I commented on a similar post to this, which was speculating the reason behind Bitcoin dropping about 2 or 5% within a short time.

It seems like most of these 'media houses' simply Google recent events whenever Bitcoin price drops and writes an article on how that is what stimulated the price action. This is mostly inaccurate as it's just a regular day in Bitcoin market cycle.
Zooming our of the charts a bit more, this drop would be quite insignificant.

This thread is a better fit in speculation board as that discussed trading action and price movements, but it's not really a general topic for Bitcoin discussion.

[OgNasty]

Thoughts?

Bitcoin is still coupled with traditional investments and acting like a speculative investment instead of the safe haven it is billed to be.  I hope at some point as the stock market & housing market implode, Bitcoin will separate itself and move opposite everything else.  It's important to remember that while Bitcoin has had an incredible run, it has never faced a recession.  There is a good chance that the value drops significantly along with everything else, but I'm hoping that isn't the case.  Would love to see Bitcoin hit $200K while the stock market suffers a 30% loss from here, but so far all signs point to it being a victim of it's investors and the overall market as a whole. 

[Jody.Drummer]

Unfortunately the time span you use is too short. Compare inflation rates over the years with charts that are minutes or hours long. Obviously not a balanced benchmark. Perhaps you mean the short-term impact after the announcement made Bitcoin drop below $30K. This decline could be only temporary due to the panic of the US public to temporarily withdraw their finances in the Exchange.

[TheNineClub]

Bitcoin and the crypto market went down today after reports came out that the US inflation rate hit 40-year high in May

US Inflation Quickens to 40-Year High

BTC price chart. Source: bitstamp

"Despite hopes that the worst of the inflationary period was over, May's CPI print came in at 1% month-on-month and 8.6% year-on-year — a return to levels not seen since 1981. Estimates had only forecast around half as much of a jump for last month. Bitcoin immediately felt the pinch as the market appeared to balk at the prospect of further monetary tightening to tame increasingly aggressive price increases."

Thoughts?

Expected. We tend to think of crypto as a decentralised network and therefore completly autonomus from outside factors, but that's just not the case. When there is a looming threat of economic collapse like there is now, people tend to buckle down and not invest. And like it or not, crypto, for the most part, is still considered and investment.

[DeathAngel]

I don’t think this is the bottom, we are only mid way through 2022. The halving is still 2 years away. If we are to follow the path from previous cycles there is still a capitulation event to come, we haven’t seen it yet.

Just prepare & be ready to buy under $25,000.

[Gyfts]

First of all, we are in unprecedented times with inflation. Bitcoin has not existed long enough to have coexisted in a market with 40 year high inflations. You need to give it more time for the analyists to draw conclusions. There isn't enough data. Secondly, the global economy isn't doing well, and plenty of institutional investors are not involved in crypto assets due to fears of recession. Investors are putting their money into tangible investments (precious metals, housing, etc.) That's going to drive the price down, obviously.

Don't panic.

[uneng]

Inevitably, inflation is going to skyrocket in US and in Europe due to the economical policies adopted by FED and ECB, but for now it's still profitable for big investors to participate these traditional markets, because interest rates are going to increase, what can be really profitable on short run, just like ponzi schemes are for early investors. However,once inflation hits hard and in high intensity, those investors will cashout their profits and come back to crypto market in order to protect their funds by investing on the most reputable cryptocurrencies (mainly bitcoin and ethereum) while speculating part of their funds, as usual, in altcoins. That is the next bull run I'm waiting for.

That is my read of the scenario and that is why I think bitcoin is still dropping with such news. Investors are fleeing for now, but they are going to come back soon.

[noormcs5]

Technically btc should go up with news linked to inflations in fiat markets because logically Bitcoin's point becomes stronger with every bit of depriciation in dollar. I think this was just a market reaction to the news immediately overall this will should give green signs in bitcoin as this is an absolutely positive news. If anyone has another point how these can be connected please do tell.

I also think the same that with this inflation news, the US dollar should go down and the bitcoin which is non-inflationary.
 
Bitcoin reacts too quick to the news and that's not good for bitcoin. Why does everyone dumps their bitcoin on such news  Believe me, bitcoin will remain bearish for next two days and will pump again on Monday.

[Welsh]

Remember that correlation doesn't equal correlation, and quite frankly when you're looking at data like this, with such a small time frame it's almost impossible to take anything conclusive from it, even ignoring the above phrase.

I don't think it will have much a short or long term impact on the price of Bitcoin. At the end of the day Bitcoin is its own currency, and doesn't depend on USD. However, the higher inflation rates rise, the more people who will be looking for alternatives, and Bitcoin will be at the top of the list.

[virasog]

I don’t think this is the bottom, we are only mid way through 2022. The halving is still 2 years away. If we are to follow the path from previous cycles there is still a capitulation event to come, we haven’t seen it yet.

Just prepare & be ready to buy under $25,000.

Anything can happen in crypto but i am still optimistic that we may not hit 25,000$ because we haven't hit the expected highs in this bull run.
Secondly, there is no need to panic yet and bitcoin has been moving inside a range where the bottom is near 29,000$ and the top is 32000$. If bitcoin closes a day below 28,000$, then it may be a moment of concern for the bulls.

[Iadegbola34]

Bitcoin was originally created to negate the inflation on fiat currencies, so a news about high inflation rate on the USD should naturally affect the price of bitcoin positively. Therefore, if your chart says bitcoin moved downward when the report was released it can only means that it has no effect whatsoever on Bitcoin.

It seems the media always find a way to link any economic report to bitcoin even when the charts clearly say otherwise.

[passwordnow]

IMHO, this had happened before. If it goes under $25k-$20k then that would create a panic for buying. Too many events in the global markets that have been pushing the other markets down too. It's likely that most the people are putting hard money on cash just for anything to be prepared for and after when the dust settles and there's a clue or hint that these crises are about to end, we'll see more money flowing again in bitcoin. Needless to say, even it's not doing good for bitcoin right now, it's normal to see it fluctuate this much and after this, we'll see it skyrocket.

[FlamingFingers]

Expect bitcoin to go up within the next few days, the CME gap that ought to be filled has been filled, likewise btc longs is getting more pump on bitfinex, such longs mostly indicates the bottom its been accurate for the past few years, so all in all we might see 34k within the next few days, I'm expecting a very high volatility of the market, longs is gonna be liquidated likewise short will also be liquidated, lots of manipulation incoming

[KingsDen]

This is the issue I have with fundamental analysis:

Bitcoin is not a stable coin, it is subjected to continues movement in either ways of the market. But the media influencers and so acclaimed analysts always tie bitcoin movements to any concurrent economic news. Even when what happened was an obvious coincidence, one news or the other must take credit for the bitcoin action.

The chart you displayed in zoomed in and on hourly bases, and that should not be used as a major indicator that it is tied to US inflation rate.

Very soon bitcoin will grow pass this economic and political speculations.

[suzanne5223]

The reason for the current dump in the price of the Bitcoin market can be caused by many reasons which are the market's current momentum are still bearish, and for some weeks now the BTC market has always gone dips during the weekend. Therefore, the report of the US inflation rate hitting a 40year high is not the reason behind the downtrend of the Bitcoin market and if history repeats itself in the BTC market I believe we haven't seen the bottom price.