Why Bitcoin Could Be About to Pump if This Signal is Right - US CPI Explained

cryptonews.com:

The leading cryptocurrency, Bitcoin, suffered a massive drop, losing more than 12% to $19,850 amid stronger-than-expected US CPI figures. Before the news release, technical indicators, particularly the 100-day moving average (MA), indicated the possibility of a bullish trend continuation. However, the BTC/USD has fallen below the moving average, resulting in a significant drop. 

In this update, I will discuss the fundamentals that drove a sharp sell-off in Bitcoin and the technical outlook that suggests Bitcoin may be about to pump if the signal is right.

The Bureau of Labor Statistics released one of the most anticipated data sets, the Consumer Price Index (CPI) and Core CPI, during the US session. Both figures outperformed the previous month's release, fueling a strong rise in dollar demand. 

Consumer prices rose 0.1% month on month, following a flat reading in July and falling short of a 0.1% reduction estimate. The US CPI index was 296.17 points in August, compared to 296.28 points the previous month and 295.53 points expected by the market.

The annual inflation rate in the United States fell for the second month in a row to 8.3% in August 2022, the lowest in four months, from 8.5% in July. However, it's still above market expectations of 8.1%.

To understand this, we first need to understand what inflation is. It reflects a change in the price of consumer goods and services. So a higher inflation rate signifies solid economic growth. However, if the CPI figures cross the Fed's inflation target levels, it becomes hyperinflation, which isn't considered suitable for the economy.

The US government has mandated a 2% inflation target to maintain price stability. The results are beneficial for long-term preparations. However,