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Why Is Crypto Up Today? Impact Of The U.S. Consumer Price Index (CPI)

Crypto Writer Jared By Jared Kirui Oct 14, 2022 #Bitcoin (BTC)
Bitcoin BTC

✍️ 14 October, 2022 – 9:26 👤 Editor: Jakub Motyka

The global crypto market cap added 2.8% in the past day to $940 billion. Major tokens are currently on an uptrend. Bitcoin is up 3.6% at $19.8k, while ether has gained 3% at $1,326. Among the altcoins, Uniswap is leading the recovery at 11% as at the time of writing

The volatility relates to Thursday’s Consumer Price Index report. From the CPI data, investors are speculating at a 0.75% interest rate hike in November and December. In general, September recorded an 8.2% YoY inflation rate compared to 8.3% for August. 

Short Positions Liquidated Following The Unexpected Price Surge 

Prior to the inflation numbers, Bitcoin price had dipped to as low as $18,300. The downward pressure pushed BTC trades to a three-week high short versus long ratio. As a result, investors placed short trades in large amounts, causing the liquidations

On-chain data shows that speculators shorted bitcoin as well as altcoins. According to Coinglass, more than 136,000 investors lost over $300 million

Similarly, the data indicates that futures contract liquidations jumped as well. Specifically, about 88.76% of futures liquidations in the current bull market relates to short traders.

Many feared that a rising inflation could prompt interest rate hikes, possibly driving the economy into recession and a crypto winter. However, the prices did not take long before it recovered. 

Volatility Equally Shakes Crypto-Related Stocks

Following the latest U.S. CPI statistics report, crypto stocks were also dealt a blow. Coinbase shares, Marathon Digital, Microstrategy, and Block all dropped before the figures came out.

Consequently, major indices, Nasdaq Composite and S&P 500, fell. The trend happened when BTC surged above $19,000

Senior analyst at Finder, Frank Corva, recently remarked that inflation would affect the price of digital assets even more. The analyst forecasts a reduction in the amount people use to speculate riskier assets like crypto.

He added that the situation could worsen amid a decline in the purchasing power of major global currencies. The trajectory of the price of the digital assets remains to be seen how it will fair from here. 

More crypto news:

EN: Jared Kirui is an experienced financial writer with a passion for all things blockchain technology. Previously, he was into stock markets and forex, providing asset managers with top-notch content. With a flair for producing high-quality articles, he started covering crypto news in 2021. He is open-minded, trades for fun, and enjoys sports.

ES: Jared Kirui es un escritor financiero experimentado apasionado por todo lo relacionado con la tecnología blockchain. Anteriormente, estuvo en los mercados bursátiles y forex, brindando a los administradores de activos contenido de primer nivel. Con un don para producir artículos de alta calidad, comenzó a cubrir noticias crypto en 2021. Tiene una mente abierta, comercia por diversión y disfruta de los deportes.
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Crypto Writer Jared

By Jared Kirui

EN: Jared Kirui is an experienced financial writer with a passion for all things blockchain technology. Previously, he was into stock markets and forex, providing asset managers with top-notch content. With a flair for producing high-quality articles, he started covering crypto news in 2021. He is open-minded, trades for fun, and enjoys sports. ES: Jared Kirui es un escritor financiero experimentado apasionado por todo lo relacionado con la tecnología blockchain. Anteriormente, estuvo en los mercados bursátiles y forex, brindando a los administradores de activos contenido de primer nivel. Con un don para producir artículos de alta calidad, comenzó a cubrir noticias crypto en 2021. Tiene una mente abierta, comercia por diversión y disfruta de los deportes.

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