On Sep 12, the US Consumer Price Index (CPI) in August was released. The CPI is a measure of US inflation, which accelerated to a fresh 40-year high in recent months. Previously, each time the CPI was announced, Bitcoin price in particular and the whole crypto market in general fluctuated strongly in the short term.
According to the latest data released, the US CPI in August was 8.3%, a mild slowdown from the 8.5% reported for July. However, analysts had forecasted a 8.1% increase so the number was still higher than expectations. US inflation does not seem to have many positive signs, and is even more serious than analysts’ predictions.
Due to this not-so-positive signal, BTC and ETH both started to dump strongly. BT price is trading at $21,261, sliding sharply from $22,800 just minutes before the CPI was released. Selling pressure is showing no sign of stopping now. Meanwhile, ETH price is trading at $1,610, also dropping strongly from $1,760 a few minutes ago.
In upcoming days, the crypto community is focusing their attention on the Paris hard fork, Ethereum’s final step to complete The Merge. In addition, because the CPI is still running hot, it is likely that the Fed will raise rates by another 0.75 percentage point. According to Fed Chairman Jerome Powell, the Fed is turning increasingly hawkish, hiking rates fast enough to slow inflation while maintaining economic growth. The agency intends to maintain interest rate hikes to reach the target of 2% by the end of this year.
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