The US Consumer Price Index, a comprehensive indicator of the prices of goods and services used in daily life, rose 9.1% from a year earlier. Both traditional and cryptocurrency markets crashed following the announcement. The prices of the two biggest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), fell by almost 5%. However, it did not drop as much as expected.
Ethereum fall to inflation
At the time of the CPI report, the price of the second largest cryptocurrency fell to $1,019 per unit. Prior to the announcement, the price of ETH fluctuated around $1,089. He managed to bounce back from the initial slump.
The price of Ethereum has fallen by around 15% in the past 30 days. At press time, the average price of ETH is $1,037.
ETH/USD hovers close to $1k. Source: TradingView
The data shows that bitcoin price declined to trade below the 19K price barrier. But to reach $31.8 billion, its 24-hour trading volume increased by more than 14%. However, the initial drop in bitcoin price reversed. At press time, it was trading at an average price of $19,317.
The last four hours have seen a liquidation of around $49 million in Ethereum, according to Coinglass. While in the same time frame, Bitcoin experienced a liquidation of around $33 million. Solana (SOL) declared a liquidation of nearly $3.43 million in the meantime.
Inflation at its highest in 40 years
According to reports, the annual adjusted CPI rate in June was 9.1%. A projection of 8.80% was made. While the percentage for the previous quarter was 8.60%. But it would be the biggest increase since November 1981.
The cost of food and energy would be the main contributors to the increase. The likelihood of the Fed raising the rate another 75 basis points in September is extremely high. Nasdaq futures were down nearly 1.5%, S&P 500 futures were down 1%, and Dow futures were down 0.6%.
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Featured image from Shutterstock, chart from TradingView.com