Bitcoin (BTC) is facing an increase in selling pressure after the release of unexpectedly high September inflation data for the United States. The asset’s capital outflow has sparked speculation over the Federal Reserve’s next step to combat inflation.
Specifically, Bitcoin’s market capitalization was at $352.18 billion at the time of publication, reflecting a loss of $8.48 billion within two hours. According to CoinMarketCap statistics, the flagship cryptocurrency had a market value of around $360.66 billion prior to the revelation of inflation numbers.
Notably, the most recent data will certainly result in increased interest rates. The Federal Reserve’s tightening measures have impacted demand for risky assets such as Bitcoin. The present climate has also been unfavourable for equities.
The most recent statistics indicate that the September CPI rose 8.2% on a year-over-year basis, above the projected 8.2% increase. Simultaneously, the core CPI touched 6.6% YoY, marking the highest level since 1982.
In addition, Bitcoin’s price has continued to decline, with the currency trading at $18,300 as of press time, representing losses of about 4% over the previous twenty-four hours.
Tom Dunleavy, a cryptocurrency specialist, cautioned that Bitcoin’s price will likely continue to decline due to factors such as Bitcoin mining activities.
“Bitcoin approaching 17k. This is the area to monitor for possible miner dumping, which may cause another large leg down,” he tweeted on October 13.
Even if a portion of the market recently said that Bitcoin has hit its bottom after stabilizing between $19,000 and $20,000, the Fed’s future move remains unpredictable.
Moreover, market circumstances may spark another increase in Bitcoin volatility. According to Finbold, Bitcoin’s volatility has decreased to historical levels, making it a more reliable investment than equities. Concerns have been voiced, however, about the decline in volatility accompanied by reduced trading volumes.
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