This is the Cause of Bitcoin Prices Falling Again Since Yesterday

The Cause of Bitcoin Prices Falling Again

According to a Bitcoin Magazine report, the US inflation data released last night has brought the US dollar index higher, reducing investors' risk appetite for riskier assets such as stocks and cryptocurrencies.

As the relationship between the stock market and the crypto market remains high, both are falling rapidly in response to investors' responses to US data that looks gloomy for risk assets.The US inflation data released were actually lower than the previous two months, June and July, but were still high at 8.3 percent for August.

Several main sectors experienced high inflation rates, such as fuel (66 percent), utility gas (33 percent) and the energy sector (24 percent).That still raises the prospect of a rate hike from the US central bank, the Fed, so the market sees this as bad for risk assets and good for the US dollar.

It is expected that the Fed will continue to tighten policy and raise interest rates by 0.75 percentage points in September, as the Fed Chair, Jerome Powell, pledged to return inflation to 2 percent.According to a Block Works report, the latest inflation data quickly brought Bitcoin prices down another 6 percent, and Ether (ETH) prices down as much as 8 percent, as traders speculated on the Fed's next move.

At the time of writing, BTC and Ether prices are trying to recover slowly, but not so to be expected as there is not yet a strong sentiment that can match the pressure from the US inflation data.The decision on interest rates will come at the Fed meeting on Wednesday (21/9/2022), where most observers believe interest rates will be raised.

"The Fed's cycle of tightening has led to so many recessions because they're always looking in the rearview mirror," said Danielle DiMartino Booth, CEO and Head of Strategy at Quill Intelligence LLC.