Make Kitco Your Homepage

Bitcoin pulls back to $23K as traders await tomorrow's CPI print

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - Global financial markets experienced a pullback in prices on Tuesday as investors took a step back from trading ahead of tomorrow’s Consumer Price Index (CPI) report.

The details of the report will help provide insight into whether or not the Federal Reserve’s aggressive rate hiking thus far has had any effect on soaring inflation and could influence the size of future hikes moving forward.

Derisking activity by crypto traders resulted in a pullback in the price of Bitcoin to a daily low of $22,876 at which point bullish reinforcements arrived to bid it back above support at $23,000.

BTC/USD 4-hour chart. Source: TradingView

Ethereum, likewise, saw its value plunge 8% off of Monday’s highs to hit a daily low of $1,669 before dip buyers managed to push its price back near support at $1,700.

ETH/USD 4-hour chart. Source: TradingView

As it stands now, the consensus coming from analysts across the markets is that July’s data will be lower than the 9.1% record figure that was seen in June, but it is still projected to be well above the historical average as well as the Fed’s stated target of 2%.

Derisking ahead of the CPI print

The fear that inspired Tuesday’s pullback across the crypto market was addressed by independent market analyst Michaël van de Poppe, who posted the following Tweet detailing the important support and resistance levels to keep an eye on.

A follow-up Tweet from Poppe noted that “the trend is still upwards” despite the current correction and identified $21,300 as the level that needs to be held in order to continue the trend.

Overall, the consensus across crypto Twitter seems to be that the current pullback is the result of derisking behavior ahead of the CPI print, with analysts suggesting that the outlook will become more clear once the report is released on Wednesday.

Altcoins trend lower

Relatively few tokens in the top 200 were shielded from Tuesday’s pullback as crypto traders fled to the safety of stablecoins where they await an update from the Fed.

Daily cryptocurrency market performance. Source: Coin360

The top performers on the day include Spell (SPELL), which climbed 32% to hit a daily high of $0.00159, followed by Celsius (CEL) with a gain of 18% and Reserve Rights (RSR) with a gain of 8.3%.

The overall cryptocurrency market cap now stands at $1.088 trillion, and Bitcoin’s dominance rate is 40.5%.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.