Bitcoin (BTC) briefly lost $20,000 support overnight into Sep. 14 after hot United States inflation sent risk assets crashing lower.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Markets lose big in bid to “fight the Fed”
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it hit lows of $19,870 on Bitstamp — its worst since Sep. 9.
The move came amid a stocks rout triggered by Consumer Price Index (CPI) inflation data for August coming in above expectations.
Despite still being lower than July, the market had hoped for a quicker cooling of inflation more broadly and hence the chance of a quicker loosening of policy by the Federal Reserve.
With that prospect now appearing slim, equities indexes hemorrhaged value, with Apple losing $154 billion — the sixth-biggest daily loss in U.S. stock market history.
Tech selloff on Tue has been particularly costly for Apple. World’s most-valuable comp lost $154bn in market value – a wipeout that ranks among top 10 worst single-day market value losses in US stock market history, acc to BBG. That’s more than mkt cap of ~90% of S&P 500 comps. pic.twitter.com/M32soxmDPn
— Holger Zschaepitz (@Schuldensuehner) September 13, 2022
“Markets had tried desperately to spin a bull case and fight the Fed, basically, and that’s a dangerous place to be,” Carol Schleif, deputy chief investment officer at BMO Family Office, told Bloomberg.
In total, U.S. stocks fell by approximately $1.6 trillion on the day — more than four times the Bitcoin market cap.
The U.S. dollar consequently increased in strength, with the U.S. dollar index (DXY) surging back towards twenty-year highs.
At the time of writing, the index circled just under 110, less than 0.9% below that macro peak seen earlier in the month.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
“Septembear” comes back to haunt BTC bull
At the time of writing, cross-market crypto liquidations totaled $355 million, with Sep. 13 forming one of the largest long liquidation events in recent weeks.
Related: Bitcoin margin long-to-short ratio at Bitfinex reach the highest level ever
Data from on-chain monitoring resource Coinglass also captured $88 million of short liquidations on that day.
Crypto liquidations chart. Source: Coinglass
The sell-off thus left BTC/USD up just 1% for the month of September, which was nonetheless still the first “green” September since 2016, Coinglass showed.
BTC/USD monthly returns chart (screenshot). Source: Coinglass
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