BTC price drops as US inflation reaches 40-Year High

tygeade

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Quote from: STT on October 17, 2022, 10:20:20 AM

If anything the inflation makes BTC to rise more probable as dollar itself becomes worth less, you are reducing the common denominator to prices so like a balance scales the other side to the price is more likely to rise.
The reason why we see the opposite is main markets are quite fearful of rising interest rates and other measures (if inflation is persistently high). BTC is still quite well comparatively, we are past the 30 day average and I hope make a good challenge to the 50 day.

People have seen the increase of inflation even today, and think that inflation causes bitcoin to drop. What they do not realize is that the real inflation increasing stuff happened a year or two ago when pandemic happened and there were trillions of dollars printed, and that meant devalued dollar and that is why people were capable of buying bitcoin in bulk as a whole world, now?

Now there are no printing and there are situations where people ended up putting their money into interest, meaning they took it out of the market and people cannot see that for some reason.

Yes, the inflation is still high but they are fighting against it, which hurt the price of bitcoin, we need to learn to see that.

savetheFORUM

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Quote from: Leviathan.007 on October 17, 2022, 07:15:38 AM

Recently we see a bearish market and the price of bitcoin is falling which can be a correction in the long term because the trend is still upward in long term regardless of what happening right now in the market, but the inflation rate in the USA is increasing in the long and short term which can be a bad signal for them to see the inflation rate reaching the 40 years high this can be a big difference between these two bad situations.

That was not recent mate but the bears have started long time ago. What we see recently are only a small declines which was still part of the long term bear but you are right that despite all of this, there is still a way that btc can recover and pump soon so people shouldn't despair too much. Instead they need to use this as an advantage for bagging more coins.

What we can't only disregard right now are the economic problems such as the inflation which rates are still increasing continuously. This is one of the factors which could affect the btc price negatively because maybe people are pulling out some of their money to aid them.

Vinaa77

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Quote from: tomahawk9 on October 13, 2022, 09:12:16 AM

"US Inflation Faster Than Expected in September, Bitcoin Falls"

Of course inflation in the United States has an influence on the price of Bitcoin. However investors should be able to maintain the current price of Bitcoin. Of course there is some crypto that is sacrificed, or the price will drop even more even though the Bitcoin price remains at $19k. For the crypto price pump not seen at the moment, may have to wait for 2024 to come.

BitcoinGirl.Club

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Quote from: melody82 on October 13, 2022, 01:11:23 PM

I don't care about the short term stuff. It's all too complicated anyways. I just like to keep it simple and hold!

Those day/week traders are making good money from it when bitcoin is going down to $19k and moving up over $20k.
But one day suddenly the price will keep moving up and will not going to go back to the bottom they were expecting. In the mean time they sold the BTC at somewhere $20k to $21k. Imagine their face for selling early. LOL

Hodling is the best in any investment, if you consider Bitcoin as your investment then just HODL.

Lucius

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Even if we don't have the current situation, I believe that Bitcoin would still be in its regular bear market, although it seems to me that the price would be at least 20-30% higher than it is now. What pushed us this low is surely the biggest crypto scam in history with the Terra/Luna fiasco that caused over $60 billion in damage, and from which the crypto market will not recover for a long time.

Pandemic, inflation, recession and war have their consequences, but a lot of people lost everything they had because some hypocritical little bastard played with what he shouldn't have.

STT

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If anything the inflation makes BTC to rise more probable as dollar itself becomes worth less, you are reducing the common denominator to prices so like a balance scales the other side to the price is more likely to rise.
The reason why we see the opposite is main markets are quite fearful of rising interest rates and other measures (if inflation is persistently high). BTC is still quite well comparatively, we are past the 30 day average and I hope make a good challenge to the 50 day.

Leviathan.007

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Recently we see a bearish market and the price of bitcoin is falling which can be a correction in the long term because the trend is still upward in long term regardless of what happening right now in the market, but the inflation rate in the USA is increasing in the long and short term which can be a bad signal for them to see the inflation rate reaching the 40 years high this can be a big difference between these two bad situations.

Ultegra134

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Honestly, despite the awful economic situation out there, Bitcoin is actually not performing as badly as some of us are pointing out. Over the past few months, Bitcoin has approximately settled at the $20.000 mark, with only a few occasional ups and downs ranging between $18.000 and $21.000. Compared to other assets such as indexes or stocks that are in a free fall, Bitcoin is actually performing quite well.

We live in a day and age where everything is correlated with each other. While cryptocurrencies were first meant to be decentralised online currencies, Bitcoin has evolved into an asset similar to gold. It'd be foolish to expect it to perform at its best during such a period of recession.

With that being said, I'm generally satisfied regarding Bitcoin's performance in the past few months, I honestly anticipated a way larger drop in price, way below $20.000, but it seems that it's successfully resisting.

SquirrelJulietGarden

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Quote from: Tony116 on October 13, 2022, 06:16:34 PM

And now bitcoin is up again and above $19.4k, like nothing ever happened, it can be seen that bitcoin is resisting this CPI news pretty well. But with the CPI not falling as expected, the Fed will be disappointed and continuing to raise interest rates to new highs is inevitable. Many rate prediction charts have removed the 0.5 level and replaced the November low of 0.75% and the 1% level mentioned. If the Fed decides to raise 1% then bitcoin and the market will see a terrible dip.

FED revealed their plans months ago that they will increase interest rates more until they can control the crisis. Inflation was done during the pandemic with which people think stock market, crypto market got benefit from money printing. Now they think about it oppositely but if they think carefully, they should realize consequence of money printing, in 2020 or 2021, not have to wait until this year.

They don't have to wait for news from FED about CPI, interest rates and anything like that.

Tony116

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And now bitcoin is up again and above $19.4k, like nothing ever happened, it can be seen that bitcoin is resisting this CPI news pretty well. But with the CPI not falling as expected, the Fed will be disappointed and continuing to raise interest rates to new highs is inevitable. Many rate prediction charts have removed the 0.5 level and replaced the November low of 0.75% and the 1% level mentioned. If the Fed decides to raise 1% then bitcoin and the market will see a terrible dip.

eaLiTy

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Quote from: tomahawk9 on October 13, 2022, 09:12:16 AM

~
Last time I made a thread about the increase in the U.S. consumer prices and its impact on the crypto market was in June , we saw the same behaviour in the market

All credit goes to the Biden Administration and with the mid terms coming he wanted the OPEC to ramp up the oil production and now they have rejected and he has warned the Saudi's about repercussion of not following their orders Cheesy

. In a short period of time they created a shit show and you cannot expect anything better if the policies are shit and most of the time spending time in dividing people which does not make any sense.

To be frank i am sad to see that the BTCitcoin market is also dancing around the tunes of the overall market situation which was inevitable but the good old days were better.

cryptomaniac_xxx

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Quote from: buwaytress on October 13, 2022, 09:23:39 AM

Ah, so that's what happened. Out all day and as usual sneaked a look at price, couldn't immediately say if it was more market news or a delayed reaction from yesterday when there were stock selloffs in Asia.

Yeah, I think that the Asian market is our savior, or at least not selling, usually the sell off happens during North American time. But I guess time has change as well, market selling is anytime at this point, regardless on what region we are.

Quote from: buwaytress on October 13, 2022, 09:23:39 AM

More pain to come, interest rates not going to let up. BTC still surprisingly resistant though, no?

This has been the case, when we hear CPI news and it is usually negative, crypto and traditional market reacts. And I do agree that we are still surviving at his point, the lowest low is still $17,500.

buwaytress

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And, just as observed a few months ago (July/August jobs report I believe?), after the stumble in price right after worst-than-expected figures, after half a day price has actually clambered back ABOVE day's start.

Makes one wonder, what happens when we finally get a report with figures better than expected.

Quote from: hosseinimr93 on October 13, 2022, 11:32:21 AM

Quote from: teosanru on October 13, 2022, 11:20:50 AM

Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively.

When inflation rate is high, federal reserve may increase the interest rate to control money supply and decrease the inflation rate.
Given the current high inflation rate, it's expected that federal reserves increase the interest rate by 75 basis points in their next meeting. This is affecting all the markets including bitcoin.

And because interest rates are so high, wealthy are converting to cash, short term deposits earn guaranteed profit while being highly liquid. Virtually zero risk dollar wealth growth. And when you consider how other major and minor currencies are currently plumbing decades low vs dollar, USD's never been so attractive in my lifetime.

melody82

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I don't care about the short term stuff. It's all too complicated anyways. I just like to keep it simple and hold!

Beefcake

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Quote from: Mpamaegbu on October 13, 2022, 11:47:42 AM

Quote from: hosseinimr93 on October 13, 2022, 11:32:21 AM

Quote from: teosanru on October 13, 2022, 11:20:50 AM

Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively.

When inflation rate is high, federal reserve may increase the interest rate to control money supply and decrease the inflation rate.
Given the current high inflation rate, it's expected that federal reserves increase the interest rate by 75 basis points in their next meeting. This is affecting all the markets including bitcoin.

Your explanation still doesn't make it any clearer because ordinarily one would expect that people will find a safe haven in Bitcoin or any other financial instrument like gold to hedge against inflation. I've monitored the relationship between Bitcoin/Pounds and Bitcoin/Euro, I discovered that Bitcoin follows the pounds pattern more. That's it goes up or dips whenever pound does the same. Today's movement differs. Perhaps, Bitcoin price will respond and move up like pounds is doing before the end of today.

It has to do with the expansion and contraction of the money supply. Interest rates going down increases the money supply, up has the reverse effect. At least in theory. The stock market almost always goes up when the interest rates go down, and vice versa. See: Alan Greenspan's market manipulation. This wouldn't seem like it should effect bitcoin price, but remember the markets aren't what they used to be. Before institutional investors got involved, retail investors more or less controlled the market. Now we are just a drop in the bucket. So when institutions pull out investments as interest rates rise, this includes bitcoins. This may be because they are investing on margin, or because they see better returns elsewhere where they can get a better %. It gets complicated, and I don't really understand it all, but that is how I understand it.

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Quote from: Mpamaegbu on October 13, 2022, 11:47:42 AM

Your explanation still doesn't make it any clearer because ordinarily one would expect that people will find a safe haven in Bitcoin or any other financial instrument like gold to hedge against inflation.

Expectation versus reality and now everyone has had a full cycle of 4 months of cold showers of reality

When the fed increases the rates to combat high inflation and there are signs of a possible recession happening people don't rush to these, first because the lower class which is the most affected can't spare the money in the first place, the middle class seek far more secure and guaranteed investments like bonds and the ones that still have money they re already tied in the stocks, so you won't see them selling in a bear market to lose money to drive the price up in a thing that's already in a bear market.
Time for everyone to acknowledge facts, when people are faced with huge bills coming in or with the perspective of losing jobs the last thing they think of is investing the little money they have in some assets that for a lot of them is still quite hard to understand.
Furthermore, if you put money in gold or bitcoin to hedge against inflation, once you're out of money, what do you do? Not taping into your reserves, as that's why you invested in the first place, to have a cushion once your expenses gain the upper hand over the income?

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Quote from: teosanru on October 13, 2022, 11:20:50 AM

Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively. I mean if you see fiat market is the biggest competition of Cryptos or you can say Cryptos is the biggest alternative for fiat. If fiat is struggling people will tend to pump their money into crypto which will in turn pump the market. How does it makes the market fall? Also if the inflation will go down how will it benefit the crypto market in that scenario?

Bro, your question is the opposite of the current situation as inflation is high that is a good time for the crypto as investors are considering the crypto as the solution, from crypto I am only talking about BTC. Fait is obviously the biggest competition for the BTC as Fait markets own capital and BTC owns whatever you need. Inflation in the Faits is in favor of BTC from a neutral perspective.

Mpamaegbu

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Quote from: hosseinimr93 on October 13, 2022, 11:32:21 AM

Quote from: teosanru on October 13, 2022, 11:20:50 AM

Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively.

When inflation rate is high, federal reserve may increase the interest rate to control money supply and decrease the inflation rate.
Given the current high inflation rate, it's expected that federal reserves increase the interest rate by 75 basis points in their next meeting. This is affecting all the markets including bitcoin.

Your explanation still doesn't make it any clearer because ordinarily one would expect that people will find a safe haven in Bitcoin or any other financial instrument like gold to hedge against inflation. I've monitored the relationship between Bitcoin/Pounds and Bitcoin/Euro, I discovered that Bitcoin follows the pounds pattern more. That's it goes up or dips whenever pound does the same. Today's movement differs. Perhaps, Bitcoin price will respond and move up like pounds is doing before the end of today.

hosseinimr93

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Quote from: teosanru on October 13, 2022, 11:20:50 AM

Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively.

When inflation rate is high, federal reserve may increase the interest rate to control money supply and decrease the inflation rate.
Given the current high inflation rate, it's expected that federal reserves increase the interest rate by 75 basis points in their next meeting. This is affecting all the markets including bitcoin.

teosanru

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Just explain this to me please anyone. How even in a normal scenario will inflation in fiat markets effect bitcoin negatively. I mean if you see fiat market is the biggest competition of Cryptos or you can say Cryptos is the biggest alternative for fiat. If fiat is struggling people will tend to pump their money into crypto which will in turn pump the market. How does it makes the market fall? Also if the inflation will go down how will it benefit the crypto market in that scenario?

Mpamaegbu

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Oh, really. I haven't checked financial news today. Now I know why all trading pairs against the US dollar went haywire upon opening my trading app. The US dollar is taking a severe beating because of that news. However, I'm still confused why the effect is in reverse motion for BTC/USD pair. I know BTC correlates with the British pound (GBP) against the dollar in movement but today it seemed to have gone contrary, digging for the ground.

hosseinimr93

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tomahawk9, US inflation rate isn't at its 40 year high now.
As you mentioned in your topic, September annual interest rate was 8.2%. That's 0.1% lower than August annual interest rate and obviously can't be at 40 year high. It was US core inflation rate that reached its 40 year high, not inflation rate. In core inflation rate, food and energy products are excluded.

Hamza2424

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Well, Inflation is not the only problem with the US as you can see the whole world is going through this one. I have covered a topic on BTC and inflation and I won't tag it here. In that topic, I have learned a lot as Inflation cant be controlled for thelong term we need inflation to survive that is a fact too. So point is you need to learn how to deal with inflation.

bittraffic

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What I don't understand though is that the value of the USD is still high. Is it crashing up?

The inflation could really get worse because of the OPEC decision to cut down the production of oil to 2M barrels a day. Not sure how true it is but it's speculated that US will raise interest again up to 1% also this month. So BTC after all is still affected.

Pierre 2

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I don't think this is a surprise. I was totally expecting coin market crash after their raise in rates. Money printing always comes with many issues. Consider developing economies. They are nearly all crashing to ground. So Bitcoin actually performed better than many options out there. We should not panic, in my opinion. I personally prefer to sell my big Bitcoin inventory, although I think this is gonna be temporary thing.

spectre71

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Welp, us Americans including myself tend to think myopically about things. We can make rules of engagement here and think it's for the world. I haven't needed it (yet) but the tax wash is a great tool and mitigates my losses, the man doesn't mind taking my money when I win.

But these things will still be going on all over the world however their government allows. Less the better, no matter how good idea it seems inviting the govt in your life never works out, ever.

SquirrelJulietGarden

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US inflation, global inflation are not new things. We can predict how it will happen after the massive printing from central banks over the globe after the pandemic.

It started 2 years ago and we are only witnessing some delayed reports on that problem. How did people think that the USA and other nations won't be in inflationary crisis if the US government printed 40% of money supply within a few months since the pandemic announcement from WHO? Same goes for other countries and their fiat currencies.

Why did people feel panic today, last few months, but not in 2020 or 2021? If they are not panic now and in near future, and if they can hold their Bitcoin, they will be winners in 2023 or 2024.

coolcoinz

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If you look closely, bitcoin is doing much better than the stock market. We are hitting new lows on indexes, but bitcoin isn't even at its yearly lows.
I've seen Cathy Wood comment on that and she said that it's normal that emerging tech comes on top in late stages of the bear market.

Bottom line is, people see the value in bitcoin and as the inflation goes up it begins to look more like a safe haven than a risk off asset. What looked like the first thing to dump at 60 or 50k is now an opportunity below 20k.

Doan9269

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Obviously we are in October and the bitcoin price is still rotating along the same axis, US inflation may ne getting higher and tougher indeed but that is not what we work on in determining the price for bitcoin or predict more dips to go down below what we are having, if you notice that ever since the incident of US inflation there have been any tangible difference that cause bitcoin to go down beyond the same range it has always been right before now, $17k maybe the lowest for now but on several occasions it has attempted going beyond $20k but on a resistant level, there may not be any tangible difference that will change the current circles within the end of this year with bitcoin price and never expected further low than we've got already.

Zanab247

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I guess, this inflation is not only affecting US economy alone but is also affecting others countries of the world economy, and according to economist researchers, next year inflation will be more higher than what we are experiencing now, which US inflation will increase to 50, and some digital currency will also experience the effect too. I don't think, if this inflation that is affecting other countries economy will also affect Bitcoin price, because during the pandemic Bitcoin price was pumping massively to allow investors to earn well from their investment, but since heavy inflation appear in the land, the price of Bitcoin is depreciating that is making investors to worry if this inflation can also cause Bitcoin price not to pump higher.

pawanjain

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This was quite expected though. The money printing machine can't get enough with the printing. Increase in inflation rate was an obvious thing.
People I know already predicted that bitcoin price will decrease as soon as the CPI rates are out.
Panic selling will halt soon though. I don't think this will have a long term impact on bitcoin's price.
I "hope" this is the bottom and we do need a correction which bounces back bitcoin price above $20k.

buwaytress

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Ah, so that's what happened. Out all day and as usual sneaked a look at price, couldn't immediately say if it was more market news or a delayed reaction from yesterday when there were stock selloffs in Asia.

More pain to come, interest rates not going to let up. BTC still surprisingly resistant though, no?

tomahawk9

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"US Inflation Faster Than Expected in September, Bitcoin Falls"

BTC price 1-Day chart. Source: bitstamp

Quote from: https://www.coindesk.com/markets/2022/10/13/us-inflation-faster-than-expected-in-september-bitcoin-falls/

"The Consumer Price Index – the most widely watched gauge to track inflationary pressure in the U.S. – rose 8.2% in September from the same month a year ago, slightly higher than the 8.1% forecasted by economists. The index rose 0.4% from August."

Last time I made a thread about the increase in the U.S. consumer prices and its impact on the crypto market was in June, we saw the same behaviour in the market

Topic: BTC price drops as US inflation reaches 40-Year High (Read 322 times)