CPI Inflation Higher Than Expectations

CPI Inflation Higher Than Expectations


2022-08-06 19:38:45

Market situation

The consumer price index, a broad measure of the prices of goods and services, rose 8.3% from a year ago, beating the Dow Jones estimate for an 8.1% gain. That represents a slight drop from the March peak but is still close to the highest level since the summer of 1982.

Excluding volatile food and energy prices, the core CPI was still up 6.2%, versus expectations for a 6% gain. So the market panicked and continued to plummet in both stocks and cryptos.

Bitcoin at one point dropped to $26,000. Altcoins fell sharply.

Stocks fell in all three of the Dow Jones, S&P 500 and Nasdaq indexes. Oil continued to hold at $104/barrel. Similarly, gold is flat at 1852 USD/ounce.

BTC plummeted causing more than 1 billion USD of leveraged orders to be liquidated on exchanges within 24 hours. Most liquidation orders are Long orders.

The long squeeze caused the volume of highly leveraged orders to decrease somewhat. In general, the amount of leveraged orders on the exchange is still high.

Update events of LUNA

The CEO of Luna Foundation, Do Kwon spoke out yesterday as the community waited for a solution from him. After a series of his sharing, Do Kwon mainly shared about how Luna works and co-stable the UST protocol. In the end, he had no solution for the current situation of Luna and UST. Parties such as banks, investment funds as well as exchanges do not support capital for LUNA. Currently, Do Kwon will do nothing and cannot do anything to save the situation. Therefore, the LUNA coin was continuously printed, causing the price to drop dramatically to less than 0.0005 USD.

The fact that a large coin fell so quickly caused the parties mentioned in the rumors of the previous day about LUNA’s case to also speak up. Gemini has refuted claims that it helped LUNA down by giving 100,000 bitcoins (worth $2.8 billion at press time) to investment firms BlackRock and Citadel, via its main Twitter account. his consciousness.

As reported by Forbes, BlackRock and Citadel have also denied related allegations. Citadel, according to one source, is not involved in stablecoin trading, including UST. Like Citadel, BlackRock states that they do not trade UST.

The event also attracted the government and major press. Treasury Secretary Janet Yellen highlighted the latest news about the UST algorithm co-stable losing value during a Senate Banking Committee hearing. She emphasized that the UST incident shows that stablecoins are growing rapidly and there are risks to financial stability. Therefore, the government needs a suitable legal framework to regulate this market. Many investors fear, this event is a reasonable excuse for officials who do not like crypto to criticize and introduce stricter laws to the market.

In this event, a lot of people lost a lot of money, affecting a lot of people, especially those who believed in LUNA. Many people try to attack Do Kwon and criticize him on the internet, social media offends some people or sometimes there are tweets disparaging other people being poorer,… Or he once bet money up to $10 million when Sensei Algod said something he didn’t like to hear about LUNA.

Miners continue to hold BTC

The percentage of BTC profitable has dropped to around 55%, this drop in price has been lower than BTC’s deep drop in May last year.

The market was scared but the number of stablecoins on exchanges decreased according to CryptoQuant data. This is an indication that stablecoins are used to buy crypto in the market.

Selling force from small miners is still there. But the big miners on the contrary continue to store BTC. Some of the biggest miners remain unconcerned and insist their operations will not be affected by negative price movements.

Some large mining companies see it as an opportunity to gain market share as smaller competitors collapse. Companies like Marathon and Redivider, Les, Riot have prepared in advance and are not affected by Bitcoin volatility.

The BTC market has had a lot of strong price drops. At such times, many press channels or celebrities have said that BTC will die.

This goes from when BTC was under $1 to more than $27,000 now. It is important that investors have a clear capital management strategy and have confidence in the market. With preparation, when the market goes down, it is time to accumulate BTC at a good price.

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