On Tuesday, when a higher-than-expected reading of the August consumer price index sent market prices tumbling, Bitcoin followed suit.
At 12:45 PM EST, one bitcoin was worth $20,804.00, down 7.31 percent from its earlier value.
Those profits have been wiped out by the recent price drop. On Libertex trading platform, Bitcoin’s price reached a monthly high of $22,764.49 on Tuesday morning before dropping.
The U.S. dollar weakened last week as investors anticipated Tuesday’s inflation report, which was widely anticipated to reveal that inflation had dropped off.
TIPS: Say goodbye to fear of losing in bitcoin or any crypto trading
This helped propel the digital asset’s surge, which last week sent it back above the crucial psychological $20,000 barrier. Ethereum’s price rose in anticipation of the network’s long-awaited update.
Despite the decline in gas prices in August, inflation increased month over month, according to the Consumer Price Index. As investors brace for more aggressive interest rate hikes from the Federal Reserve, the U.S. dollar rose and stocks fell substantially.
When interest rates increased, investors sold off riskier assets like cryptocurrency.
With the highly anticipated Merge happening between September 13 and 15, the price of Ether, the Ethereum currency, dropped by more than 6% on Tuesday.
At the time of the merge, Ethereum will make the transition from a proof-of-work model to a proof-of-stake one.
The change will make Ethereum safer and more efficient in terms of energy use. Further, it should encourage more people to put their money into the second-largest cryptocurrency market cap after bitcoin.
The precise timing of the Merge is still unknown. Also, the three days that investors are waiting for could end up being insufficient.
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