On Tuesday, April 12, the U.S. Labor Department released the inflation numbers for March 2022 which stood at 8.5%, the highest in four decades since 1982. The crypto market had already anticipated this event entering into a steep correction earlier on Monday.
Just as the inflation numbers stood in accordance with the market expectations, Bitcoin (BTC) and the broader crypto market are showing a marginal bounce back. Explaining this, on-chain data provider Santiment reports:
When #inflation and #CPI data releases are major subjects of interest for the #crypto community, price turnarounds generally occur. We’ve seen a decent #crypto bounce today with #consumerprice data revealing a higher than expected 8.5% rise in March.
Bitcoin (BTC) and the Broader Crypto Market
After a strong correction on Monday, Bitcoin (BTC) is showing strength to hold above $40,000 levels. As of press time, the broader crypto market is up by 2.21%. BTC has also remained in the green zone over the last 24 hours.
On the other hand, Ethereum (ETH) is showing a good bounceback jumping 2.68%, and is currently trading above $3,000. Also, all of the top ten altcoins are in the green territory with gains between 2-5%.
The next support for Bitcoin will be at $37,500 says crypto analyst Lark Davis. If Bitcoin reverses to the north from here, it will mark the formation of higher lows.
If #bitcoin can stay above the red line then all of this price drama will simply result in a higher low! NUTS! pic.twitter.com/zHTn2RSCnp
— Lark Davis (@TheCryptoLark) April 12, 2022
However, Davis shares another interesting trendline with $39,876 serving as a good immediate support level.
IF #bitcoin can push higher from here it would be a nice bounce point and keep that trend line intact. pic.twitter.com/9qZk47Enl1
— Lark Davis (@TheCryptoLark) April 12, 2022
For now, the U.S. inflation numbers are certainly concerning! This will force the Fed to initiate stricter measures of quantitative tightening to increase interest rates faster than expected. Thus, we could be seeing greater volatility in risk-ON assets such as crypto going ahead this year.
BitMEX CEO Arthur Hayes recently predicted that the Nasdaq 100 (NDX) Index could go to the 10,000 level and below in case of extreme Fed measures. Since crypto closely follows this index, he expects crypto carnage by June 2022 wherein BTC could find a bottom at $30,000 and ETH could find a bottom at $2,500.
