The U.S. reported on Thursday morning its worse-than-expected CPI data for September 2022 resulting in a major slip in the crypto market. Bitcoin and the rest of the crypto market reacted immediately with BTC tanking all the way down to $18,000.
Santiment, an on-chain data provider, however reported that BTC price started rising higher as the short vs long ratio on exchanges touched a 3-week high. The data provider speculated:
"Traders shorted #Bitcoin & #altcoins heavily as #inflation news broke. When $BTC hit a 3-week high short vs. long exchange ratio at 2pm UTC, prices reversed course & began rising, & many betting against #crypto got liquidated. Prices move toward the crowd’s least expectation."
Do take note that the strong bounce in the U.S. equities was also noticed during the short covering in the Bitcoin price. Following the September CPI report of 8.2%, the Dow Jones Industrial Average tanked nearly 300 points in the early trading session.
Dow Jones nonetheless ended up more than 800 points in the positive by the end of the day. It was then simultaneously followed by Bitcoin and the broader crypto market's price actions.
Bitcoin Investors' Sign of Caution
Bitcoin is trading 3.76% up at a price of $19,811 with a market cap of $379 billion as press time. While Bitcoin has given the recent price jump to $20,000, it continues to still rank lower in terms of social dominance. As Santiment iterated:
"Traders are chasing short-term pumps right now to salvage losses. Weak hands dropped out of #crypto in 2022, & long-term traders are waiting for #Bitcoin to begin receiving the spotlight again. When $BTC social dominance is high, prices typically rise."
The altcoin space is also showing an overall recovery along with Bitcoin. Ethereum (ETH) is also up 3.36% and is trading at a price of $1329 with a market cap of $163 billion. It will be interesting to see if Bitcoin and the broader crypto market can hold up longer to this recent price rally.