Cryptocurrency markets, such as bitcoin, reacted uneasily yesterday following the revelation of a purported US inflation data breach. The US Bureau of Labor Statistics was even obliged to issue a press statement claiming that the data in circulation was incorrect.
While the fabricated statistics indicated 10.2 percent inflation, the market expected 8.8 percent. The markets hoped that inflation would be even lower than projected, relieving the Fed of the need to accelerate monetary policy tightening.
Chris Weston, director of research at Pepperstone Group, wrote:
“Headline inflation below 8.5% could lead to a scenario of the general dollar falling and cryptocurrencies rising by more than 5%.”
However, nothing came of it, as newly released data indicates that the US consumer price index surpassed estimates by 9.1 percent. Core inflation was projected to fall from 6.0 percent to 5.7 percent, but analysts were once again mistaken, as core inflation is really 5.9 percent.
The American futures all responded badly to this news, and Bitcoin appears to be preparing to attempt the psychologically significant threshold of $19,000 soon.
If any FOMC members speak out on the inflation numbers in the next few hours, the bearish trend may pick up even further.
Technical pricing benchmarks for bitcoin
Bitcoin dropped -3.58 percent at a BTC/USD price of 19,161 dollars. The day’s peak may have been above $20,000, but with the revelation of the inflation numbers, the price dropped like a stone.
The daily closing price fell below the 23.6 percent Fibo retracement of $21,110 on July 10. Since then, the price has continued to decline, and the cryptocurrency is now on track to hit the cycle low of $17,630.
Only by successfully reclaiming the 23.6 percent retracement would a rise towards the 38.2 percent Fibo retracement of $23,263 be viable.
