Bitcoin took a turn for the worst some hours to the time of writing. The apex coin was on its way to retest the $23k resistance but stopped in its tracks as it experienced an immense amount of selling pressure.
Nonetheless, it peaked at $22,781 before the correction. As a result of the downtrend, BTC is currently exchanging at $20,600. This denotes a more than 7% decrease from the peak. It comes as a shock as many traders expect more price increases following the notable positive fundamentals.
While many shun the dip and pretend it never happened, others are in search of why there was a sudden change in trajectory. What changed?
Bitcoin React to CPI Report
The consumer price index is an instrument used to measure inflation. The latest report on this metric shows that there was higher inflation than expected. Watchers expected an 8.1% increase in inflation but saw an 8.3% which caused panic across stocks.
Currently, the price correlation between BTC and these traditional instruments is positive which means the apex coin will react the same way stocks did. The chart below is a comparison between the BTC/USD pair and NASDAQ 100.
We observed an almost identical price movement. It is safe to say the largest coin by market cap only responded to the sentiment in the stock market. However, bitcoin is yet to halt its downtrend.
One of the key levels all eyes are on at this time is the $20k support. Unfortunately, it is almost certain that this mark will fail as previous price action hints at the level as one of the weakest.
Once $20,000 fails, one of the toughest supports is the $19,500. Traders could bank on that level as several attempts at it failed. An earlier outlook noted that the apex coin will experience short-term uptrends. Have these bullish moments finally come to an end?
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!