The CPI report dampens the Bitcoin and Ethereum euphoria, while stocks also fall

The September 13 inflation report (1) showed a headline of CPI (2) rising by 0.1% month over month, despite the pain being felt in the cryptocurrency and stock markets. Core inflation increased 0.6% month over month and 8.3% year over year as a result of gas prices falling to multi-month lows and a cooling property market.

Major market participants and investors predicted that the Federal Reserve (3) would raise interest rates by 0.75 basis points next, and many of them also believed that the CPI report for September 13 would come in weaker than expected. Crypto traders anticipated Bitcoin BTC, Ether ETH (4), and a few other altcoins to break out to the upside given the market situation that had reportedly priced in a 0.75 bps hike, but the exact reverse happened.

Natural risky assets also fell, including the Dow (5), which fell about 2.6%; the S&P 500, which fell 2.9%; and the Nasdaq, which fell 3.6%. The price of Bitcoin lost more than 50% of its weekend gains, falling 9% to $20,350, and the price of Ether, fell 7.29% to $1,590. The majority of cryptocurrencies in the top 100 are currently experiencing single-digit losses.

Despite earlier analysis's warning that BTC was also trading close to significant overhead resistance, Bitcoin's weekend bounce from September 9 continued into this week as its price climbed as high as $22,800. The BTC's price has fallen to $22,400 since the market opened and the monthly CPI data has been reported in the media, but the multi-month barrier from the all-time high has been maintained.

The analysis also drew attention to a bear flag continuing trend that has been active since the price of bitcoin peaked at $69,000 on November 10, 2021. The most likely trajectory for Bitcoin, however, continues to be downward, barring some exceptionally bullish merger events.

Bitcoin's price has fluctuated in its 90-day range between $25,400 and $17,600 despite the dip on September 13.