- BTC’s 9.26% price drop and S&P500’s 4.32% decline may be correlated.
- BTC may fall by another 20%, estimates Fidelity’s global macro director.
- Several altcoins have been impacted by the US CPI inflation figure alongside BTC.
Bitcoin (BTC) and the broader crypto market plummeted on September 14 (Tuesday) on higher-than-expected CPI inflation statistics. Notably, Bitcoin’s price drop coincided with the S&P500’s 4.32% decline and a dip below the $4,000 level, highlighting the correlation between the two indexes.
📉 After a brutal #CPI report on disappointing inflation news Tuesday, #Bitcoin fell alongside the #SP500‘s biggest daily drop in two years. The correlation between the sectors remains high, and #crypto typically thrives best with zero #equity reliance. https://t.co/6rmAF5RF9o pic.twitter.com/GGVZUtNC1F
— Santiment (@santimentfeed) September 13, 2022
Arguably, Bitcoin is likely to remain in the bear’s clutches as long as it continues to follow the equity market. Currently, BTC is down 9.26% over the past 24 hours, barely above its crucial support level of $20,000.
Until now, historic inflation figures have driven the price of everything under the sun — from gasoline to groceries — to all-time highs. However, In light of these dips, one question to consider is how deeply integrated the crypto market is with the global economy.
The director of global macro at Fidelity, Jurrien Timmer, estimated that if Bitcoin maintains its correlation with the S&P500, another 20% decline below $16,000 is highly plausible. Meanwhile, inflation news has again prevented Bitcoin from crossing its 200-day moving average (DMA), a crucial resistance zone.
The Bitcoin Fear & Greed Index dropped from 34/100 to 27/100 on Tuesday, just as the US CPI inflation figure was released. However, it has not yet entered the “extreme fear” zone, indicating that investors are still resilient at this stage.
Several altcoins felt an impact alongside Bitcoin. A day before the Merge event, Ethereum (ETH) dropped over 7% to hit $1,594.21. As the Merge approaches, ETH has seen some selling pressure, following the momentum of “sell the news.”