Traders are turning tails as CPI approaches this week and BTC and ETH price returns to the range to test underlying support.

Cryptocurrency and stock markets fell slightly on Aug. 9 as traders got a little nervous ahead of tomorrow’s Consumer Price Index (CPI) report. The release details will shed light on whether the Federal Reserve’s aggressive rate hike is effective in curbing runaway inflation and whether it could affect the size of future rate hikes.

Earlier this week, Tesla CEO Elon Musk hinted that July data would reflect the peak of US inflation and that any recession would be “mild to moderate.” For now, everyone agrees that the July data will be below the record 9.1% seen in June. Energy prices (oil, natural gas) fell sharply in July and the Fed is hoping that the previous 0.75 basis point price hike in a row will offset price increases in other sectors of the economy.

As usual, Bitcoin (BTC), Ethereum (ETH) and most altcoins have retreated as traders reduce risk ahead of CPI printing. BTC price fell to $22,800 while Ethereum corrected to $1,670. The rationale for traders hiding in stablecoins is reasonable, but from a technical analysis perspective, the August 9th pullback is just a test of lower support after last week’s recent reversal of support and resistance, and large- Cap assets like ETH and BTC remain to trade in their multi-week ranges.

Traders hide until the CPI is released
According to independent market analyst Mikael van de Poppe, fears surrounding the Aug. 10 CPI are “unfounded” and after completing a series of retests, the price of BTC should surge to $28,000.

In addition to telling the story that the current pullback is “expected,” trader @52kskew suggested that BTC’s price action is being affected by a “healthy criminal rip-off,” as spot bitcoin sells at “logical resistance.”

A trader going by the alias Big Smokey explained that the general market correction is merely “lessening the risks for traders waiting for this week’s CPI release”.

The trend for traders to interpret “recent Fed reports + CPI print market results” as dovish continues, Big Smokey said, and if that trend continues, the market could rally if inflation readings are lower than June.

Analyst Dylan Leclerc, on the other hand, believes stocks are broadly in the “late stage of a bear rally in stock markets,” and he suggested that BTC would hit bottoms in the next six to 12 months if the “correlation 1.0 event ” entry. “.

The total cryptocurrency market cap is currently $1.09 trillion and Bitcoin’s dominance rate is 40.5%.

Source: CoinTelegraph