Bitcoin’s value rebounded after dropping to a low not seen since July 2 minutes following the release of September’s inflation reading that came in well above expectations.
Bitcoin was changing hands at $19,407 Thursday afternoon, up 1.35% in the last 24 hours. Shortly after the inflation release, bitcoin had plunged to $18,195, according to crypto indexer, CF Benchmarks.
Year-over-year inflation for last month was 8.2% for September, according to the government’s U.S. Consumer Index Price (CPI), higher than Wall Street’s consensus expectations for 8.1%. Excluding food and energy, the core inflation rose 6.6% from a year ago, marking the highest level since 1982.
The data show that inflation is proving more difficult to tame despite multiple Federal Reserve interest rate hikes that have largely depressed stocks and cryptocurrency this year.
“A worse-than-expected inflation reading is anything but good for traders,” Michael Safai, a partner with crypto trading firm Dexterity Capital, told Yahoo Finance. But with the “less rosy outlook,” volumes picked up and some directional traders snatched bargains, he added.
When inflation has come in higher than consensus estimates this year, bitcoin has sold off an average of 4% in the 30 minutes following the economic release, according to Singaporean crypto fund QCP Capital.
Read more: Google Cloud to let users pay with Bitcoin, Ethereum via Coinbase
Though today’s move fell in line with the 30-minute average, its still leaving plenty of market observers puzzled. While bitcoin held onto its $18,000 floor, it continues to trade in a muted range to equities.
The Nasdaq (^IXIC) fell as much as 3.2% on Thursday, before closing up 2.23%. The S&P 500 (^GSPC) lost as much as 2.4%, before ending 2.6% higher.
Over the past month, the Nasdaq and S&P 500 have each sold off by 13%. After having lost 56% in the second quarter, bitcoin has fared slightly better, down 4% for the same period.
