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Cryptocurrencies Succumb to Losses on U.S. CPI Data Even as Ethereum Merge Looms

bitcoin technical

  • Crypto and stock markets are feeling the pain after the Sept. 13 inflation report printed an unexpectedly hot figure that showed headline inflation rising by 0.1% month-over-month.
  • The majority of cryptocurrencies are also nursing single to double-digit losses against a backdrop of bearish sentiment on concerns of further interest rate hikes. 

Cryptocurrencies are once again demonstrating their strong correlation with stock markets and reeling from recent U.S. inflation data which showed headline inflation was at 8.3%, down from July’s figures, but above most economist estimates. 

Cryptocurrency markets are also braced for a possible test ahead from the upgrade of the Ethereum blockchain, known as “The Merge.” 

The upgrade to slash Ethereum’s energy use is due late Wednesday or Thursday and has now been overshadowed by macroeconomic factors of risks of large U.S. Federal Reserve interest-rate hikes.

Bitcoin plunged almost 10% and is currently trading around US$20,300, giving up more than 50% of its recent weekend gains. 

Ether, the native token of Ethereum, extended recent underperformance to drop to US$1,600, despite bullishness on the success of The Merge. 

The majority of cryptocurrencies are also nursing single to double-digit losses against a backdrop of bearish sentiment on concerns of further interest rate hikes. 

Barring an extremely bullish Merge event, risks remain heavily skewed towards the downside.

Many institutional players are cottoning on to the potential behind The Merge, including banks and financial institutions which have been building atop Ethereum in anticipation.

An array of financial services are built atop Ethereum, making it a critical cryptocurrency highway, so any snafus in the software upgrade from proof-of-work to a proof-of-stake paradigm could ripple across digital asset markets and cause untold damage.

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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