Surge In Core Inflation Drags Cryptos Lower

Cryptocurrencies plunged again as the hopes of a softer monetary policy triggered by the expected fall in inflation readings were dashed with the release of the CPI and core CPI readings for the month of August 2022.

Data from the U.S. Bureau of Labor Statistics showed the headline annual inflation falling to 8.3 percent from 8.5 percent earlier, disappointing markets which had priced in a fall to 8.1 percent. The Core CPI, which excludes food and energy prices and is more favored by the Fed to assess price pressures in the economy, increased to 6.3 percent, from 5.9 percent in the previous month and exceeding market expectations of 6.1 percent.

The surge in inflation and the fears of another 75-basis points rate hike by the Fed in its September review, lifted the Dollar and pushed the Dollar Index to as high as 109.56. The Dollar Index is currently at 109.18, a 0.78 percent jump in the past 24 hours. Yields on 10-year U.S. treasury bonds have hardened around 2.4 percent overnight to 3.4 percent, pricing in the aggressive rate hike expectations.

The Wall Street futures are down more than 2 percent. The European stock markets are also trading deep in the red. Taking cues from the Dollar’s strength and the spike in bond yields, Gold Futures for December settlement plunged almost 1.5 percent and is currently trading at $1,715 per troy ounce.

Overall crypto market capitalization dropped close to 5 percent overnight to $1.02 trillion. Only four of the top 100 cryptocurrencies are trading with gains of more than 1 percent. Stablecoins now occupy close to 15 percent of the overall crypto market.

Bitcoin which had touched a high of $22,673.82 in the past 24 hours, has plunged to a low of $21,262.04, down more than 5 percent on an overnight basis. BTC Dominance is currently at 39.9 percent.

Ethereum’s fall is much steeper at 8.2 percent, touching a low of $1,606.62 despite expectations surrounding The Merge, due less than two days away. Ether had touched a high of $1,752.76 in the 24-hour horizon. Ethereum now dominates 19.3 percent of the overall crypto market.

5th ranked BNB (BNB) is trading 4.5 percent lower, whereas 7th ranked XRP (XRP) is trading almost 4 percent lower. 8th ranked Cardano (ADA) dropped 8.9 percent and is the worst performer among the top 10 cryptocurrencies. 9th ranked Solana (SOL) has declined more than 6.5 percent. 10th ranked Polkadot (DOT) is down more than 8 percent.

38th ranked Hedera (HBAR) that gained 3.2 percent overnight is the biggest gainer in the top 100 category. 21st ranked Litecoin (LTC) has also added more than 3 percent in the past 24 hours. 84th ranked Trust Wallet Token (TWT) has gained more than 2.5 percent on an overnight basis.

100th ranked Golem (GLM) that plunged 23 percent, 70th ranked Lido DAO (LDO) that dropped 14.5 percent, 68th ranked THORChain (RUNE) that shed 11.95 percent, 71st ranked Curve DAO Token (CRV) that lost 10.8 percent and 73rd ranked Terra (LUNA) that declined 10.5 percent, are the biggest losers in the top 100 category.

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