Bitcoin became uneasy and lost 5% of its value slipping to $18,000 level after the Consumer Price Index Report showed inflation in the U.S rose by 0.6% in September. This caused $55 million in Bitcoin futures liquidations at derivatives exchanges. The BTC price dip lasted less than five hours.
At the time of writing this article, Bitcoin regained 3.81% in the last 24 hours and was trading at $19,811. Ethereum was changing hands at $1,327 after having gained 3.36%. The altcoins have also recorded gains. Ripple’s XRP is up 5.88%, Solana 3.92%, Cardano 3.70% and Polkadot 2.53%.
Jon Campagna, head of trading and capital markets at CoinFund, said there has been a culmination of a month-long build-up in protection purchasing and a build up in implied and realized volatility. He noted the pronounced declines in Bitcoin and Ether one-day trading volumes from the previous night following the CPI report. There was a similar dynamic in equities markets. Campagna said the CBOE Volatility Index declined 4.5%. He pointed out that the CPI number was hot, an unexpected level of hot which caused a relief rally as the put protection was sold and books were adjusted to slightly increase risk.
Moreover, crypto prices coincided with equity markets, which also sank early before rebounding with a vengeance with the tech-focused Nasdaq, S&P 500 and Dow Jones Industrial Average jumping over 2% to break six-day losing streaks. Bearish sentiment remains after the CPI report came out.