Bitcoin did not crash after inflation data release but bounced instead
Following the expectation of the release of inflation data, the markets have once again received the signal of the upcoming tightening of monetary policy, which directly affects the performance of cryptocurrencies and digital assets in the market. But the reaction we’ve seen isn’t as bad as most analysts expected.
Why didn’t Bitcoin crash?
The main reason behind the lack of downwards volatility could be the fact that the market had already priced in a negative scenario with CPI, hence avoiding any unexpectedly high volatility movement.
Whenever the absolute majority of market participants anticipate a certain event that is expected to affect the market, they simply fix it in advance, which is why almost nothing happens when an event occurs. Sometimes traders refer to this general rule with the saying “buy the rumor, sell the news”.
Anemic performance continues
While the cryptocurrency market did not crash in the same manner, we saw back in June and even bounced a little, the lack of inflows and trading volume on Bitcoin and other assets means that we will not see any significant upward movements.
Bitcoin always moves in the flag pattern, which usually occurs in pronounced downtrends, reflecting the market’s desire to “calm down” before making further moves. Historically, the flag pattern that appears during downtrends is a harbinger of an upcoming dip.
Numerous experts and cryptocurrency traders expected another plunge before the full reversal of Bitcoin as some on-chain metrics suggested that there is enough room to fall further.
At the same time, the lack of selling and buying volume in the market suggests that the first cryptocurrency will most likely continue to consolidate until a disruptive event emerges in the space.
