Bitcoin CPI Day Price Swing Sparks Fears Ahead of Fed Decision

On August CPI print day, Bitcoin saw an extraordinary price swing of more than $4,000 within hours.

The cryptocurrency initially dropped to around $76,500 after the inflation report was released, but then bounced back through $77,500 and spiked towards $79,500 before slumping again.

Funding rates had turned negative ahead of the print, indicating that short positions were piling up. However, price snapped higher instead, forcing out these shorts and flipping funding rates positive.

This violent bounce was not due to conviction buying but rather sellers getting forced out, followed by buyers who chased the top and paid for it on the slide back down.