CPI Shock and Bitcoin’s Plunge
On July 13, Bitcoin (BTC) played hide and seek with investors, plummeting a staggering $800 in mere minutes. The trigger? The hot-off-the-press United States Consumer Price Index (CPI) data that came in uncomfortably higher than anticipated. With inflation soaring to 9.1%, well beyond the expected 8.8%, it’s no wonder BTC fell under the $19,000 mark like it was on a suspended diving board.
US Dollar Reaches New Heights
The ripple effect sent shockwaves through the crypto market as well as the U.S. dollar, which climbed to its highest level in 20 years. The once-conceivable idea of the dollar and the euro trading at parity suddenly morphed into a reality; our poor euro had to take a seat below dollar parity for the first time in two decades.
Understanding the Bigger Picture
Michaël van de Poppe, a notable voice in the crypto space, emphasized that Bitcoin needed to stabilize above $19,500 to prevent further descent. Unfortunately, it seems like BTC didn’t study its math lessons on how to stay afloat, leaving many crypto enthusiasts breathless.
Inflation: The Uninvited Guest
With inflation at a level only witnessed 12 times in the last 110 years, the financial landscape appears to be taking a hit. Charles Edwards, the CEO of a crypto asset management firm amusingly stated that if today’s inflation calculations were mirroring those from four decades ago, the results would be jaw-dropping. Cryptocurrency, brace yourself!
Altcoin Adventures amid the Chaos
And while Bitcoin was busy diving, altcoins were not far behind. Ether (ETH) began to flirt with the scary prospect of dropping below $1,000 for the first time since late June, leaving investors clutching their calculators tightly. With nearly all coins in the top ten by market cap dipping between 3% to 4%, it was a tough day not just for Bitcoin, but for the entire crypto family.
A Word of Caution
The unfolding drama didn’t just end here. With volatility expected to linger, traders on Wall Street were preparing for what might unfold next. As they say, every investment carries risk – so be sure to do your homework because putting all your investment eggs in one basket is a recipe for disaster.
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