As other risk assets continue to be pressured by this week's CPI print, Bitcoin and Ethereum move within well defined bands. The macroeconomic picture is still getting worse, which puts pressure on risk in general. With this week's high CPI print, the market once more re-priced expectations for a Fed rate hike, which has fueled concerns about a future recession.
Following Thursday's CPI reading, there was a flurry of market movement that saw equities benchmarks make new YTD lows, while Bitcoin and Ethereum both managed to stay inside their predetermined channels. In a perplexing reversal throughout all of risk on Thursday's session, post-CPI lows were afterwards purchased up. As its price behavior diverges from that of the Nasdaq 100, bitcoin appears to be living up to its moniker as a "uncorrelated risk asset."
After the premarket sell-off on Thursday morning, Bitcoin found buyers on a dip into the support area over $18000. Bitcoin experienced a remarkable comeback in the second half of the afternoon, trading back above pre-CPI levels, as was the case with the majority of risk assets. Bitcoin gave up some of those gains on Friday because to the sharp risk-off mood, with the price falling toward fib support at $19225.
As of right now, neither the bulls nor the bears have been able to take the "kill shot" on Bitcoin, which is still trapped in a defined range between $18200 and $20400. It's important to note that Bitcoin has recently struggled to establish a trend since it seems to be immune (at least temporarily) to the turmoil on the world's financial markets. In the near term, I support more choppy trading as market players go from one data point to the next, even though price may eventually be headed lower in the long run as we approach recession.
Similar to Bitcoin, recent price activity on Ethereum has mostly consisted of chop. While Ethereum's loss on Thursday was noticeably greater than Bitcoin's, ETHUSD swiftly reversed the 7.7% CPI loss. Since finding buyers around $1160 this week, the price has been trading back above crucial support at $1270.
Following the completion of the eagerly anticipated network upgrade known as "the merge," Ethereum has suffered noticeably, with the upgrade proving to be a "sell the news" type of event. Should additional bids into risk assets emerge in the near future, Ethereum may try to challenge the swing high from October 6th around $1385 now that it has regained its footing.
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