Top Crypto News Today: Bitcoin bounces back to near $20,000 despite Sky-High Inflation Numbers

Bitcoin’s u-turn!

Bitcoin’s price action over the past 24-hours have been nothing short of extraordinary. First some context – we saw sky high inflation numbers coming in for the United States at about 8.2%, which is down from 8.3% in September – but still extremely high by US standards. This triggered a major sell-off on the charts where Bitcoin price fell from about $19,200 all the way down to $18,200 towards the end of the day yesterday – before staging an awesome recovery, rallying over $1700 from the lows to touch near $20,000 levels. BTC price is currently trading at about $19,800, having correcting just slightly off the highs.

BTC/USD | Source: Tradingview

In just a matter of a few hours, in the later hours of 13 October – Bitcoin price shed over 5% before immediately staging a 9% recovery soon after. It is clearly evident from the hourly timeframe chart above – BTC price fell all the way from about $19,160 all the way down to $18,222 before quickly taking a u-turn rally and recovered over 9% from those lows touching almost $19,900 by the early hours of 14 October, 2022.

Additional Read: Bitcoin Price Prediction

Over $110 million in liquidations!

This was a crazy day of trading that saw heavy trade liquidation all across the board, both on the long and the short side. According to data from Coinglass.com – Bitcoin futures traders lost over $50 million worth of positions on the long side when the market fell 5% and almost $60 million worth of short positions when Bitcoin rallied 9% from the lows.

Bitcoin Liquidations Data | Source: Coinglass.com

Now the reason behind this wild action remains a mystery. The inflation numbers from the US stands at about 8.2% this month, as compared to 8.3% from the previous month – which isn’t a significant fall. High inflation numbers typically puts additional pressures on the US Federal Reserve to keep up their hawkish view and tightening their monetary policies by raising interest rates – which plays out as a negative factor for all investment assets, including cryptos.

But this time around, what happened was exactly in the opposite direction to that of the conventional economic thought and thus raises a lot of questions on how Bitcoin and the rest of the market will react to the subsequent news going forward.

Bitcoin price action also was somewhat similar to that of the US stock market too – which opened late last evening (in IST) with a gap down but managed to close strongly in the green by the end of their trading session. Take a look Dow Jones Industrial Average and the tech-focused NASDAQ index intraday action.

Dow Jones Industrial Average & NASDAQ | Source: Tradingview

The only plausible explanation behind such a comeback action within the same day can be attributed to the fact that investors were already cognizant of the fact that inflation numbers were going to be high and had already discounted that in the prices. Hence, after a minor fall post the release of the news, assets in most of such investment classes staged a recovery soon after.

At press time, the overall crypto market was trading up about 3% at $942 billion, with Bitcoin price above $19,800, having rallied almost 4% in the past 24 hours.

Prices as on 14 October, 2022.

Related: Top Crypto News Today