Bitcoin, altcoins sell-off on record-high inflation, but traders still expect BTC to consolidate
Global financial markets once again find themselves trending lower on June 10 after the Consumer Price Index (CPI) came in at a blistering 8.6% year-over-year increase, the highest print since 1981.
The hotter-than-expected CPI print resulted in a collapse of the $30,000 support and Bitcoin (BTC) price sold off to a daily low of $28,852 before dip buyers managed to bid the price back above $29,000.
Here’s what several analysts in the market are saying about the outlook for Bitcoin moving forward since there appears to be little relief on the inflation front and the Federal Reserve is still determined to raise interest rates.
Dollar strength weighs heavily on risk assets
The effect of the high CPI print on two benchmarks of financial markets, the dollar index (DXY) and the S&P 500 (SPX), was touched on by il Capo of Crypto, who posted the following charts noting that “After CPI results, #DXY continues its pump and #SPX keeps free-falling.”
Market analyst Kevin Svenson also said that the Fed’s inability to curb inflation is likely to translate to choppy price action for the next year.
With inflation, at 8.6% that means increased rate hikes are likely. $DXY is going parabolic. #BTC and most asset classes are likely going to have to deal with lots of ranging at the lows. Sideways for a year possibly.
Instant recovery is not likely.
— Kevin Svenson (@KevinSvenson_) June 10, 2022
There’s potential for a pullback below $28,000
Should the price of BTC continue to trend lower, crypto trader and pseudonymous Twitter user Altcoin Sherpa says trading below $28,000 is possible.
Altcoin Sherpa said,
“$BTC: EMAs look the best they’ve looked in a while on the 4h but the overall high time frame market structure remains bearish. Not really doing anything active rn, just observing. Seems clear that $28K> is next up if this current area gets lost.
Related: Bitcoin price falls under $29.5K after ‘unexpected’ 40-year high US inflation
BTC needs to reclaim $30K to prevent further downside
Insight into what it would take to avoid a pullback to the support at $28,000 was provided by market analyst and pseudonymous Twitter user CrediBULL Crypto, who posted the following chart showing the “unfortunate” retrace from $30,000, the area. The analyst suggested that this “was the moment where we needed to see follow through.”
CrediBULL Crypto said,
“On support, but it’s been tested four times now, so more likely it gives way to $28K. IF we can get back above $30K, then $28K may be avoided.”
The overall cryptocurrency market cap now stands at $1.192 trillion and Bitcoin’s dominance rate is 46.6%.
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