JUST IN: Bitcoin price tumbles as US CPI sees highest spike in four decades
- US inflation rate hit 9.1% in June 2022, the highest level since 1981, indicating that Fed officials might shift to a faster pace of interest rate hikes.
- Bitcoin price plummeted in response to the increase, dropping to $19,100 at the time of writing.
- Analysts predict that the Bitcoin price could hit yearly lows if the downtrend continues.
Bitcoin price reacted negatively to the US CPI data, wiping overnight gains. The inflation rate hit 9.1% in June 2022, the highest point in four decades. Analysts expect Bitcoin price to nosedive to yearly lows if bulls fail to takeover.
Bitcoin and stock futures tumbled in response to US CPI spike
After the US Consumer Price Index(CPI) data was released, Bitcoin price tumbled, and stock futures turned negative. Bitcoin holders were closely watching the data for clues on the outlook of central-bank policy and market-wide impact.
US inflation hit its highest point since 1981, climbing to 9.1% in June 2022. While Bitcoin and Ethereum wiped out their overnight gains, experts predict the assets will plunge to their yearly lows at the current rate of decline.
The CPI reading for June 2022 was higher than May’s annual rate of 8.6%. Fed officials have shifted to a faster pace of interest rate increases. This implies the inflation outlook has worsened, and the pace of interest rate spikes could slow down the economy.
Bitcoin price once again lost significant support at the $20,000 level, and analysts believe it is likely that the asset will retest its annual low.
Martin Froehler, the CEO of Morpher, argues that Bitcoin price will fall below $12,000 before beginning to climb to $40,000 by the end of 2022.
Bitcoin price fell through its support at $19,126; analysts believe the maximum pain scenario is a decline to $18,000 and lower.
BTC-USD price chart
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
