The cryptocurrency market took another hit on Sept. 11 despite positive US macro data. The total crypto market capitalization dropped by over 1.5% to about $1.97 trillion before rising again sharply to $2 trillion amid heightened volatility.

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Let’s examine the main factors driving the crypto market’s volatility today.

Crypto prices rocked over surprise CPI data

The crypto market is volatile, mirroring the instability witnessed in US stock markets.

One hour after Wall Street opened on Sept. 11, the S&P 500 was down 1.4%, while the Dow Jones index dropped 570 points, or 1.5%. The Nasdaq Composite index slid 1.35%. These indexes have since recovered slightly as the market continues to digest the August CPI data.

Similarly, crypto prices displayed high volatility, with Bitcoin BTC

$57,443 dropping 2% over the last 24 hours to trade at $55,713 before recovering to $57,010 at the time of publication. Ether ETH

$2,333, which initially dropped by 1.9% to $2,290, is now trading 2.4% higher at $2,342.

The instability in equities and digital assets follows the August Consumer Price Index (CPI) print, which showed inflation slowing down as expected. Traders may have been poised for profit-booking after BTC displayed strength ahead of the CPI data release.

“Markets are showing us that no rally is safe, but dip buyers are still looking for bargains,” declared capital markets commentator the Kobeissi Letter in a Sept. 3 post on the X social media platform.

The US Bureau of Labour Statistics press release on Sept. 11 showed that the CPI, a broad measure of goods and services costs across the US economy, increased by 0.2% month over month and 2.5% year over year.

The Core CPI, which excludes prices of volatile items such as food and energy, rose by 0.3% in August 2024, slightly higher than expectations of a 0.2% increase and slightly higher than the 0.2% increase in July.

“The index for all items less food and energy rose 0.3 percent in August, after rising 0.2 percent the preceding month.”

The 12-month core inflation rate held at 3.2%, which is in line with expectations.


Target rate probabilities for the September Fed meeting. Source: CME



“As we have been writing for months now, it is not the time for emergency rate cuts or 50 bps rate cuts. Rather, the Fed should steadily reduce rates 25 bps at a time,” the Kobeissi Letter added.

“A meeting-by-meeting approach is needed.”

$160 million in liquidations catch traders offside

A sharp movement in the crypto futures markets appears to have caused the price volatility over the last 12 hours. The timing of the long liquidations coincided with the sharp rise in the price of digital currencies.

Data from Coinglass reveals that long traders—those betting on the crypto market’s upside—have witnessed a total of $108.25 million worth of liquidations in the last 24 hours. In comparison, short traders suffered over $54.12 million in liquidations in the same period.

Bitcoin liquidations reached $13.17 million over the last 12 hours, with over $54.61 million worth of cumulative leveraged positions liquidated on the day, according to Coinglass data. Long Ether liquidations stand at $34 million over the last 24 hours, with the tally increasing at the time of publication.


Total crypto liquidations. Source: Coinglass





When long positions are liquidated, traders who are betting on prices going up are forced to sell their positions, often at a loss. This increased selling pressure has driven the crypto market valuation lower today.

A bear flag points to a deeper crypto market correction

After failing to breach the $2.242 trillion barrier on Aug. 23, the bulls retreated toward the support level at $1.86 trillion after TOTAL, the aggregate market value of all cryptocurrencies, set a swing low at $1.814 trillion. The price has since recovered to the current market value of22:08$1.96 trillion.

Despite the recovery, a bear flag can be seen on the daily chart, which hints at the continuation of the downtrend.

The TOTAL price is counting on support from the flag’s lower boundary at $1.917 trillion. A daily candlestick close below this level would signal a bearish breakout from the chart formation, projecting a decline to $1.552 trillion. Such a move would represent a 21% descent from the current price.


TOTAL market capitalization daily chart. Source: TradingView


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