Bitcoin (BTC/USD), Ethereum (ETH/USD), Dogecoin (DOGE/USD) – Bitcoin, Ethereum, Dogecoin Crash After ‘Scorching’ Inflation Data: Analyst Says ‘Writing Was On The Chart’

Bitcoin and Ethereum traded sharply lower Tuesday evening as the global cryptocurrency market cap plunged 7.5% to $986.4 billion at 8:26 p.m. EDT.

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Why It Matters: Major cryptocurrencies dropped after the U.S. Labor Department posted the inflation numbers for August, which indicated the consumer price index rose 8.3% year-over-year. 

Even though inflation cooled off compared to the 8.5% rise in July, it came above average economist estimates of 8%.

Stocks tumbled on Tuesday, with S&P 500 and Nasdaq losing 4.3% and 5.2%, respectively. U.S. stock futures were flat at the time of writing.

“A scorching inflation triggered a stock market selloff that is also dragging Bitcoin along for the ride,” said Edward Moya, a senior market analyst with OANDA, according to a note seen by Benzinga.

“Hopes of a soft landing, the end of the Fed hiking cycle, and a resilient consumer, are fading away. Bitcoin’s plunge reminded traders it remains the ultimate risky asset and is vulnerable if stock market selloff deepens.”

Justin Bennett, who had warned investors not to get “too comfy” yesterday, tweeted that the “writing was on the chart” for cryptocurrencies and stocks.

The writing was on the chart. $SPY $SPX $BTC $ETH #stocks #Cryptos https://t.co/X5vkR3St3X pic.twitter.com/h7TWBxh4um

— Justin Bennett (@JustinBennettFX) September 13, 2022

The trader warned that he thinks we’ve still not seen the lows for Bitcoin. 

For the record, I still don’t think we’ve seen the lows for #Bitcoin.$BTC pic.twitter.com/deDaNFnPxJ

— Justin Bennett (@JustinBennettFX) September 13, 2022

Michaël van de Poppe said that the markets are pricing in a 100 basis point rate hike by the U.S. Federal Reserve for September.

Markets pricing in 100bps now for September.

Worst is getting priced in.

— Michaël van de Poppe (@CryptoMichNL) September 13, 2022

The cryptocurrency trader said, “Worst is getting priced in.”

Meanwhile, the number of Bitcoin addresses with 10 or more BTC has shot up since February, said Santiment.

The amount of #Bitcoin addresses with 10 or more $BTC has risen dramatically since mid-February. Over these past 7 months, the amount of these shark and whale addresses is up 3.6% on the network, and is back to its highest level in 19 months.  https://t.co/7bFgEh1QMh pic.twitter.com/2CwEUCMgZ3

— Santiment (@santimentfeed) September 13, 2022

“Over these past 7 months, the amount of these shark and whale addresses is up 3.6% on the network, and is back to its highest level in 19 months,” said the market intelligence platform.

On the Ethereum side, the buzz surrounding the coin’s shift to a proof-of-stake continues to be intact. Stripe CEO Patrick Collison said Tuesday that the “Merge” was “one of the coolest examples of sustained, ambitious, technically difficult open source development.”

Excited about The Merge! One of the coolest examples of sustained, ambitious, technically difficult open source development. Congratulations and good luck to @VitalikButerin and to the Ethereum community. pic.twitter.com/XGh4tWcmEG

— Patrick Collison (@patrickc) September 13, 2022

Read Next: Investors Worried About Merge As Ethereum Leads Bitcoin In $62M Crypto Outflows