Will Bitcoin Become More Volatile When US Inflation Hits 8.2%
The impact of macroeconomic factors on crypto and Bitcoin increases as inflation strengthens. Both the crypto market and the traditional market are facing a raging storm. Many international bodies fear that a possible global recession will soon break out.
Another round of volatility has started in the crypto market. The reason is the US Consumer Price Index (CPI) report. The data is at 8.2% for the September record.
The US CPI data acts as a gauge to measure the rate of inflation in the country. It records the average price change consumers pay for goods and services over time.
Core inflation in the US reaches a 40-year high
A measure of the US CPI showed that inflation exceeded many expectations. The September record indicated that the value had reached a 40-year high.
The Ministry of Labor provided further details of the report on Thursday 13 September. The core consumer price index, which excludes food and energy, rose by 6.6% over the past year.
This value is the highest mark since 1982. Additionally, it noted that from the previous month, the core CPI increased by 0.6% for the following month. Therefore, the overall CPI rose by 0.4% in September to reach the high value of 8.2% year-on-year.
Remember that in August the CPI data rose to 8.3%. In June, the annual CPI peaked at 9.1%, the highest since November 1981.
The latest CPI data increases pressure on the Federal Reserve to raise interest rates. However, the Fed has maintained an aggressive stance to curb inflation and bring interest rates down to their coveted 2% target.
There is therefore the possibility of getting a further 75 basis points as an increase in the interest rate by November. The Federal Reserve has already implemented such an increase in interest rates three times a year.
Crypto and Bitcoin Volatility
The crypto market was red as most crypto assets lost value during the week. Prices go south drastically with little or no cap on tokens.
Bitcoin has seen a case of constant fluctuations. Not only did the primary crypto asset lose its grip on the critical $20K level, its southward move even continued.
While crashing to the $19,000 region, the primary crypto assets stalled for a few days around the level, but BTC later fell below $19K to reach $18,500. This inconsistency has created fear and doubt for several participants in the crypto space. Some even highlight signs of massive volatility for the token.
At the time of writing, Bitcoin has shown little movement in mining. The token is trading at around $19,131.69, indicating an increase over the past 24 hours. Its dominance over altcoins is at 40.19%.
Featured image from Pixabay and chart from TradingView.com
