Bitcoin (BTC) is experiencing a spike in selling pressure moments after the United States inflation figures for September came in hotter than expected. The capital outflow in the asset has triggered speculation over the Federal Reserve’s next move to contain inflation.
In particular, Bitcoin’s market capitalization by press time stood at $352.18 billion, representing a loss of $8.48 billion within two hours. Before the release of the inflation figures, the flagship cryptocurrency commanded a market capitalization of about $360.66 billion, according to CoinMarketCap data.
Notably, the latest figures will likely lead to higher interest rates. The Fed’s tightening policies have dampened the demand for risk-sensitive assets like Bitcoin. The current environment has been gloomy for stocks too.
The latest data shows that the September CPI surged 8.2% on year-over-year bases compared to the expected 8.1%. At the same time, the core CPI also hit 6.6% YoY to stand out as the highest level since 1982.
Bitcoin’s price corrects further
Furthermore, Bitcoin’s price has continued to drop, with the asset trading at $18,300 by press time, recording losses of almost 4% in the last 24 hours.
Amid the ongoing correction, crypto analyst Tom Dunleavy warned that Bitcoin would likely correct further triggered by factors like Bitcoin miner activity.
“Bitcoin nearing 17k. This is the zone to watch for potential miner dumping, triggering another big leg down,” he said in a tweet on October 13.
The uncertainty around the Fed’s next move comes despite a section of the market recently asserting that Bitcoin had found its bottom after consolidating around the $19,000 and $20,000 levels.
Additionally, the market conditions might trigger another spike in Bitcoin volatility. As reported by Finbold, Bitcoin’s volatility has plunged to historical levels, trading more stable than stocks. However, concerns have been raised regarding the drop in volatility amid suppressed trading volumes.
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