Bitcoin (BTC) fell sharply on June 10 after unexpectedly high inflation data from the US shook markets ahead of the Wall Street opening.

Hourly candlestick chart BTC/USD (Bitstamp). Source: Trading View

Trader: Bitcoin Will Be ‘Painful’ If $29,300 Doesn’t Hold Up

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Data from Cryptooshala Markets Pro and trade view tracked a $600 drop in BTC/USD after the Consumer Price Index (CPI) rose in May.

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Despite hopes that the worst of the inflationary period is over, the May CPI print was 1% m/m and 8.6% y/y – return to levels haven’t seen since 1981. It was estimated that only about half the jump was predicted last month.

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Bitcoin was immediately hampered as the market seemed to be giving up on the prospect of further tightening of monetary policy to tame the increasingly aggressive price rise.

According to Bloomberg, traders were now pricing in three 50 basis point hikes in the key interest rate by the US Federal Reserve in June, July and September, respectively.

Reacting, bitcoin traders were keen to see how the various points within the current tight trading range would perform if volatility continued. For Cryptooshala contributor Mikael van de Poppe, the key area was around $29,300.

“Let’s see how Bitcoin reacts to this level of support,” he said. said Followers on Twitter after the CPI event.

“If we fall below, it will hurt.”

Meanwhile, popular commentator WhalePanda warned panicky investors against rethinking their BTC allocation due to macroeconomic circumstances.

“Dumping your bitcoin because inflation is higher than expected is one of the dumbest things you could ever do,” he said. wrote.

In contrast, the Russian ruble gained 5% on the day as the country’s central bank took the opposite trajectory of the Fed, cutting rates to levels not seen since the start of the war with Ukraine.

In further social media comments, Anthony Pompliano, co-founder of Morgan Creek Digital, described recent US monetary policy as “undisciplined” call inflation is a “national crisis”.

“The last time inflation in America was this high, they literally changed the CPI methodology,” he said. added.

US inflation chart. Source: Federal Reserve System.

US dollar bounces back due to further cryptocurrency issues

Meanwhile, one asset that was completely unaffected by the CPI was the US dollar.

$30K BTC price has ‘major impact’ on Bitcoin miners profits – analysis

The latest data from the US dollar index (CPI), which measures the strength of the US dollar against a basket of trading partner currencies, showed that the previous downtrend has reversed sharply upwards, with inflation only strengthening its trajectory.

The result is likely to be an additional hurdle for both bitcoin and risky assets in general ahead of the US equities opening.

At the time of writing, the DXY was at 103.9 points, once again approaching a 20-year high of 105 last month.

US dollar index (CPI) 1-day candlestick chart. Source: Trading View

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