Bitcoin hit a new all-time high of 69,000. Ether continued its long march toward 5,000, hitting a new high of 4,868 earlier today. However, shortly after getting this new milestone, traders began to take profits, resulting in a nearly $7,000 drop, dropping the BTC price below $63,000.
This morning’s breakout began just as the U.S. Bureau of Labor Statistics report revealed a 6.2 percent annual increase in the Consumer Price Index. This figure is the highest in 30 years. According to the BLS, Rising energy costs fueled a rise in CPI. However, analysts have been tracking increasing food and other goods prices for at least six months. The current CPI has been at its highest level since October 1990. Core inflation, which excludes the impact of rising commodity prices, increased by 4.6 percent, a level not seen since 1991.
The Federal Reserve and the Biden administration have maintained that the situation is “under control”. However, equity markets have reacted negatively to the news in the face of rising inflation.
Despite the troubling news and a slight pullback in traditional markets, BTC and Ether prices rose. The rise is a phenomenon that analysts like Anthony Pompliano refer to as asymmetric price action. Investors see a red hot stock market and unsustainable central bank monetary policy as attractive investments and hedges against gold, the dollar, and inflation.
Shortly after reaching these incredible new highs, Bitcoin’s price fell back towards $62,700 before recovering slightly to around $64,500, while most altcoins suffered near-double-digit losses.
The current downside move is likely to surprise some investors. However, Bitcoin has a history of making minor corrections after reaching new all-time highs.
According to technical analysis, profit-taking near all-time highs and the need for a retest of lower support levels are normal processes for most cryptocurrencies. Indeed, a quick scan of Twitter discussions by many analysts and traders reveals that most expected BTC to revisit lower support levels at $64,000 and below before regaining bullish momentum and moving higher. The total cryptocurrency market cap is now $2.91 trillion, with Bitcoin dominating at 41.9 percent.
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