Bitcoin price reached $69,000, a new all-time high. Ether continued its long climb toward $5,000. It had previously reached a new high of $4,868 earlier in the day. However, traders took profit shortly after reaching this new milestone. This led to a drop of nearly $7,000 in Bitcoin price, which dropped below $63,000.
This morning’s breakout occurred right at the U.S. Bureau of Labor Statistics report that showed a 6.2% increase in the Consumer Price Index. This figure is the highest recorded in over 30 years.
According to the BLS rising energy costs caused a rise in CPI. However, analysts have been tracking the rising cost of food for at least six months. CPI currently stands at its highest level since October 1990. Core inflation, which does not take into account the effect of rising costs of goods, saw a 4.6% rise, an increase that has not been seen since 1991.
CPI data highlights 30-year record high inflation rate. Source: FRED
The Federal Reserve and Biden administration continue to communicate that inflation is under control, but the negative reaction of the equities markets to this news was not surprising.
Despite the worrying news and slight pullbacks in traditional markets, BTC price and Ether price rose. This dynamic is what analysts like Anthony Pompliano call “assymetric pricing action”. Investors who see a hot stock market and an unsustainable central bank policy make risk-on assets such as Bitcoin attractive investments. They also hedge against inflation, gold, and the dollar.
Sam Bourgi, Cointelegraph’s business editor, believes that Bitcoin is the best alternative to sovereign currencies.
“Bitcoin outperformed gold,” the most popular inflation hedge, by a significant margin over the past year. It has gained more than 130%, compared to gold’s 4% decline.
Daily chart of BTC/USDT: TradingView
Bitcoin fell to $62,700 shortly after reaching these new heights. However, it recovered slightly to $64,500. Most altcoins suffered near double-digit losses.
Although the current downtrend is certain to shock investors, it is normal for Bitcoin to make slight corrections after hitting new all-time highs.
Technical analysis shows that most cryptocurrencies are used to profit taking at all-time highs, and needing to retest lower support levels. A quick look at the discussions of many traders and analysts on Twitter shows that most expect BTC to return to lower support levels at $64,000 or below before regaining bullish momentum and moving higher.
The total cryptocurrency market is now worth $2.91 trillion, and Bitcoin’s dominance rate at 41.9%.