Bitcoin Prices Climb To Roughly $19,500 After Recovering From Today’s Drop
Bitcoin prices bounced back today, rising to approximately $19,500 after falling close to $18,000 this morning.
The world’s most well-known digital currency reached as much as $19,497.46 this afternoon, according to CoinDesk.
At this point, it was up more than 7% from the daily low of $18,198.43 it hit around 8:30 a.m. EDT, additional CoinDesk figures show.
After rising to this intraday high, the digital currency managed to retain most of its gains, trading at approximately $19,430 at the time of this writing.[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When accounting for the digital asset’s early decline, as well as its subsequent recovery, analysts focused in on a handful of variables including the inflation report’s key impact on market participants and also support that bitcoin had built up at key levels.
The Consumer Price Index for All Urban Consumers, a benchmark gauge of inflation, rose 8.2% during the 12 months through September, a Labor Department report showed.
In September, this particular measure increased 0.4%, a result that was widely reported as exceeding expectations.
The core consumer price index, which strips out price increases associated with food and energy, climbed 6.6% during the 12 months through September, the largest such increase since August 1982.
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, spoke to how this development affected the global asset markets.
“The volatility today is primarily driven by the inflation report that came out this morning. This caused risk-on assets to drop across the board, as investors are worried that this will lead the Fed to maintain an aggressive stance and further raise rates,” he stated.
“Raising rates further can encourage investors to sell their risky assets like crypto or stocks and buy more conservative assets like treasuries and bonds,” Sifling noted.
Scott Melker, a crypto investor and analyst who is the host of The Wolf Of All Streets Podcast, also emphasized the crucial role this economic data played in today’s price movements, asserting that investors overreacted to the news at first.
“The knee jerk reaction to inflation data is often wrong and we see markets quickly recovered,” he stated. “That’s exactly what happened here.”
Andrew Rossow, an internet attorney, also chimed in, speaking to the inflation report and also stressing the importance of investor sentiment, noting how fear of missing out helped fuel today’s recovery.
“I think at a very basic level, FOMO is still a major factor at work here when it comes to market speculation,” he stated.
“Given what Bitcoin is and represents, fear and speculation will always drive its pricing up and down – depending on what is happening around it, such as Thursday’s latest report from the Labor Department and of course, the CPI report.”
Analysts also emphasized support levels when explaining bitcoin’s recovery earlier today.
The digital currency has been trading within a modest range for some time, displaying less volatility than it has at many points in history.
“The push down on inflation data sent price to the bottom of the trading range that bitcoin has been trapped in for months,” noted Melker.
Marc Bernegger, cofounder of crypto fund of funds AltAlpha Digital, also weighed in, noting that there is “strong support” close to the bottom of bitcoin’s recent range.
Sifling also shed some light on this topic, stating that “there is also some technical support at the YTD lows in Bitcoin that happened during the June sell off.”
“Holding those lows has been encouraging for the bulls, which could have provoked some investors to buy,” he claimed.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.