Bitcoin Drops Below $22,000 As U.S. CPI Declines Less Than Expected To 8.3%

Bitcoin lost $22,000 because of declines in energy prices. All other sectors saw an increase MoM.

  • The 8.3% inflation rate was the second consecutive month with falling CPI reports.
  • All sectors saw an increase in MoM inflation except for the energy sector, which tilted it.
  • Bitcoin fell below the $22,000 support mark following the CPI release. Stocks and gold also declined. The dollar edged up.

The year-over-year (YoY), inflation fell to 8.3%, marking the second consecutive month with a falling Consumer Price Index (CPI). Bitcoin fell below $22,000 following the release of inflation numbers, a level it has been able to maintain for the past few days.

August's CPI reading was higher than expected. Nearly every metric that tracks the metric rose MoM except for the energy sector, however. The Fed expects to tighten further as the September 75-basis point increase is fully priced in, and the chances of a 100bps rise have increased. The situation is challenging for assets like stocks and bitcoin, but the dollar will get stronger.

Although inflation seems to be decreasing, YoY numbers in many sectors remain high. Month-over-month (MoM), inflation is still a problem.

The decline in energy prices is almost the reason for this month's slightly lower CPI. Both gasoline and energy commodities saw a drop of about 10%, while fuel oil dropped almost 6% MoM. Used cars and trucks were the only sector that saw a decrease in August, with a 0.01% drop.

Fuel oil (66%), utility gases services (33%), and energy commodities (27%) are the highest-inflation sectors. The entire energy sector has risen by almost 24%.

MoM shows that utility piped services increased 3.5% in August, with the sector of Energy Services still increasing 2.1%.

While inflation may be slowing in the broad sense, the Federal Reserve still has many economic concerns to address as it continues to offload its balance sheet and raises interest rates.

By: Shawn Amick
Title: Bitcoin Drops Below $22,000 As U.S. CPI Declines Less Than Expected To 8.3%
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Published Date: Tue, 13 Sep 2022 13:30:31 GMT

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