The cryptocurrency plunge on Wednesday saw Bitcoin ($BTC) lead the broader altcoins in correction. At the time of writing, $BTC traded at around $81,861, down 2% over the past 24 hours.
Top crypto assets’ performance today. Source: CoinMarketCap
Meanwhile, Ethereum (ETH), XRP, and Solana (SOL), had depreciated by 3.17%, 2.99%, and 2.77%, respectively.
Crypto market bleeds due to sticky U.S. inflation
The broader crypto market’s devaluation was driven by the hotter-than-expected inflation data from the United States. Specifically, the Bureau of Labor Statistics noted that the underlying Consumer Price Index (CPI) was at 0.3%, while markets anticipated 0.2%, as per data from Forex Factory.
U.S. CPI data for October. Source: ForexFactory
As a result, the odds of a 25 basis points (bps) increase in the Federal Reserve’s interest rate surged to 33%, as per metrics Finbold analyzed from Polymarket. Nonetheless, traders are still pricing the chances of no rate change at 68%, at the time of publication.
Contract for the Fed’s decision in October. Source: Polymarket
Furthermore, US CPI inflation has now been above the Fed’s 2% target for 67 consecutive months.
What’s next for cryptocurrencies?
Even though the cryptocurrency market has continued to experience choppy consolidation over the past few weeks, institutional investors including Citigroup Inc. (NYSE: C) have signaled a bullish outlook.
Bitcoin’s analyst consensus index. Source: CryptoQuant
Moreover, despite the crypto market falling today, 84% of 164 analysts are bullish on Bitcoin, up from 37% in July, based on updates from CryptoQuant.
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Crypto market capitalization change for the past 24 hours. Source: CoinGecko
