The overall cryptocurrency market continues to trade under pressure with Bitcoin (BTC) and Ethereum (ETH) dropping below their crucial support levels. The crypto market came under pressure on Tuesday, July 13, as the U.S. Labor Department released the inflation data for June 2021.
The Consumer Price Index (CPI) surged 5.4% in comparison to the last year triggering a 13-year high in the month of June. The inflation spike comes as governments ease lockdown and consumer spending shoots. Also, sectors that were down during the pandemic have resumed operations.
Following the release of the inflation data, Wall Street came under pressure. The hot inflation data also overshadowed the strong earnings season for the second quarter. Naeem Aslam, chief market analyst at Ava Trade told Yahoo Finance that bears took control over Wall Street as the inflation numbers were higher than expected. Thus, it also had a ripple effect on Bitcoin and the overall crypto space.
In the past, the crypto market has behaved relatively similar to the movements in the traditional stock market. Over the last month, the crypto market has been under pressure due to the rising regulatory pressure worldwide.
Institutional Investors Grab the Opportunity
The market analyst from Ava Trade also added that institutional investors continue to pour money into the crypto space during this correction. He cites the recent entry of the worlds largest investment management firm Capital Group. The financial giant took a 12.2% stake in MicroStrategy (MSTR) which is holding more than 100K Bitcoins on its balance sheet.
“As a result of this transaction, Capital Group has gained indirect exposure to the digital assets, reassuring investors that the crypto sector has a bright future,” said Aslam.
On Tuesday, Bitcoin (BTC) slipped under its crucial support of $33,000. On the other hand, the altcoin space entered a deeper correction with Ethereum crashing all the way under $2000. At press time, ETH is trading 4.39% down at $1938 with a market cap of $227. On weekly charts, Ethereum (ETH) has lost more than 18% of its price.