Bitcoin Crashes Towards $20,000 on CPI Inflation Numbers: Market Watch

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Although the US CPI data was quite close to the estimated target, it still had a strong effect on the price of BTC, which fell towards $20,000.

Alternate coins are also deep in the red, with Solana – yesterday’s top performer – dropping double digits today.

Bitcoin plunges to $20,000

The last few days have been pretty good for the main cryptocurrency. The asset had fallen to $18,500 in the middle of last week but began its gradual recovery almost immediately.

As such, it topped $20,000 before the end of the work week and surged to $22,000 over the weekend. Even more gains came on Monday and Tuesday as it hit a multi-week high above $22,600.

This is where the landscape changed as the United States announced an inflation rate of 8.3% for the month of August. It was only 0.2% higher than estimates, but bitcoin reacted with a sudden drop in price.

The asset lost the $22,000 line and fell even lower. As a result, it briefly fell below $20,000 (on Bitstamp) earlier today for the first time in a week.

Right now, it sits just north of that coveted level, but its market cap has dropped well below $400 billion and its dominance over altcoins has shrunk 1% in one day.

BTCUSD.  Source: Trading View
BTCUSD. Source: Trading View

Altcoins deep in red

Most altcoins have been doing very well lately, but the US CPI numbers have also dragged them down.

Ethereum, ahead of the upcoming merger, surged above $1,700 and stayed there for several days. However, the second-largest crypto has plunged over 6% in the past 24 hours and is now struggling to sustain $1,600.

Similar daily dips are evident for Binance Coin, Ripple, Cardano, Polkadot, Dogecoin, Shiba Inu, Polygon, and Tron. Solana, on the other hand, was down more than 11% in one day from $40 to $33.

The situation with low and mid cap alts is pretty much the same. ATOM, NEAR, APE and FLOW became today’s biggest losers with double-digit declines.

The crypto market capitalization saw over $70 billion disappear in one day, and the metric is now below $1 trillion.

Presentation of the cryptocurrency market.  Source: Quantify Cryptography
Presentation of the cryptocurrency market. Source: Quantify Cryptography
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Cryptocurrency charts by TradingView.

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