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Here’s Why Bitcoin Just Plunged 5% in Minutes



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Alex Dovbnya

Bitcoin has erased recent gains, plunging below the $22,000 level once again

The price of Bitcoin, the world’s largest cryptocurrency, has plunged sharply on a worse-than-expected inflation report, losing 4.7% of its value in mere minutes. 

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Image by tradingview.com

The core consumer price index (CPI) rose 0.6% on a month-over-month basis, which is roughly double the forecast.        

The latest inflation data has thrown a wrench in the works for those who expected Bitcoin to finally start recovering in September after bulls managed to defend the $20,000 level. 

The cryptocurrency’s price action is still driven by broader macroeconomic factors, which is why it plunged swiftly together with U.S. stock futures. 

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The new CPI data will likely prompt policymakers at the U.S. Federal Reserve to adopt an even more aggressive monetary policy.                    

The market is now pricing in a 19% chance of a mammoth 100-basis point hike in September, but the consensus appears to be that the Fed will settle for another 75-basis point increase.   



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