Market ingests today’s inflation print. How did crypto react?

U.S. CPI data has just been revealed and shows a slight fall, but not as far as expected. 

Inflation not defeated

The Consumer Price Index year on year has just returned a figure of 6.4%. This is worse than the forecast of 6.2%. Does this mean that the crypto market will continue its recent move downwards?

Price changes rose across many elements of the CPI basket. Fuel oil rose 27.7%, gas utilities 26.7%, transportation 14.6%, electricity 11.9%, food in the home 11.3%, and food away from the home 8.2%.

Looking ahead, markets are pricing in three more interest rate increases, over the next three FOMC meetings, and further ahead in December there is the chance of the first interest rate cut.

Therefore, with 3 rate hikes now priced in, the market has full knowledge of what is coming and the worst case scenario is accounted for (obviously discounting a black swan event or worse/better than expected future inflation figures).

Large volatility

Within 5 minutes of the inflation figures being revealed $1.2 million in long positions were liquidated, but given the volatility around this time, $1.2 million in shorts were also liquidated.

The Dollar Index (DXY) spiked down to 102.600 and then wicked up to test resistance at 103.500, before settling back. Bitcoin seesawed around, plummeting to $21,500, surging up to touch the $22,300 resistance, and then settling somewhat at $22,000.

Altcoins were the same. There was a general downturn as soon as the CPI was announced, but then selected altcoins really took off to the upside.

Usual altcoins lead the field

The same altcoins and the same narratives that have been running over previous weeks were the main tokens to head the charge higher. AI coins were the leaders, with Fetch.AI (FET) and SingularityNET (AGIX) leading the way.

Liquid staking coins were just behind, with Lido (LDO) looking the best here. The ZK coins put on some decent gains with Mina (MINA) and Dusk Network (DUSK) doing well.

Then there were the odd few individual tokens that have constantly been pumping over recent weeks. Render (RNDR), Fantom (FTM), and GMX are among these.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.