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Sept. 12 will leave a mark that will probably stick for quite a while. Traders at the Bitfinex exchange vastly reduced their leveraged bearish Bitcoin (BTC) bets and the absence of demand for shorts could have been caused by the expectation of cool inflation data.

Bears may have lacked confidence, but August's U.S. Consumer Price Index (CPI) came in higher than market expectations and they appear to be on the right side. The inflation index, which tracks a broad basket of goods and services, increased 8.3% over the previous year. More importantly, the energy prices component fell 5% in the same period but it was more than offset by increases in food and shelter costs.

Soon after the worse-than-expected macroeconomic data was released, U.S. equity indices took a downturn, with the tech-heavy Nasdaq Composite Index futures sliding 3.6% in 30 minutes. Cryptocurrencies accompanied the worsening mood, and Bitcoin price dropped 5.7% in the same period, erasing gains from the previous 3 days.

Pinpointing the market downturn to a single inflationary metric would be naive. A Bank of America survey with global fund managers had 62% of respondents saying that a recession is likely, which is the highest estimate since May 2020. The research paper collected data on the week of Sept. 8 and was led by strategist Michael Hartnett.

Interestingly, as all of this takes place, Bitcoin margin traders have never been so bullish, according to one metric.

Crypto and stock markets are feeling the pain after the Sept. 13 inflation report printed an unexpectedly hot figure that showed headline inflation rising by 0.1% month-over-month.

Even with gas prices falling to multi-month lows and a cooling housing market, core inflation saw a 0.6% month-over-month bump and year-to-year inflation sits at 8.3%.

While market participants and investors had estimated the next Federal Reserve interest hike to be a hefty 0.75 basis points, many also subscribed to a loosely held assumption that Sept. 13’s CPI report would come in softer than projected.

Given that the market had supposedly “priced in” a 0.75 bps hike, crypto traders expected Bitcoin, Ether and select altcoins to break out to the upside.

Well, obviously the complete opposite occurred.

Crypto and stock markets are feeling the pain after the Sept. 13 inflation report printed an unexpectedly hot figure that showed headline inflation rising by 0.1% month-over-month.

Even with gas prices falling to multi-month lows and a cooling housing market, core inflation saw a 0.6% month-over-month bump and year-to-year inflation sits at 8.3%.

While market participants and investors had estimated the next Federal Reserve interest hike to be a hefty 0.75 basis points, many also subscribed to a loosely held assumption that Sept. 13’s CPI report would come in softer than projected.

Given that the market had supposedly “priced in” a 0.75 bps hike, crypto traders expected Bitcoin (BTC), Ether (ETH) and select altcoins to break out to the upside.

Well, obviously the complete opposite occurred.

On this week’s “The Market Report” show, Cointelegraph’s resident experts discuss the significance of the Ethereum Merge, the latest CPI data, important things to know in Bitcoin (BTC) this week and altcoins analysis.

To kick things off, we broke down the latest news in the markets this week.

Bitcoin price sheds $1K in 3 minutes as U.S. CPI inflation overshoots. Bitcoin's 4% losses swiftly ensue as inflation fails to cool as quickly as hoped for, resulting in a wave of sell-offs for the crypto market. We do a deep dive into what the data means and the implications on the wider market. Does this mark the end of the recent price pump we saw earlier this week or will we rebound once things settle down? We take a look at what President Joe Biden had to say about the latest CPI data and also what Crypto Twitter is discussing about the matter. Lots to unpack here so make sure you stay tuned as we break down the information for you.

The Fed, the Merge and $22K BTC — 5 things to know in Bitcoin this week. A bullish weekly close sees Bitcoin tackle realized price while analysts speculate on major volatility in the coming days. With the new CPI data causing the price of Bitcoin to fall, can the Merge bring some relief to the markets or will it cause further downside? We also do a deep dive into the Ethereum Merge and explain why it is such a significant event in crypto's history and why you should be keeping a close eye on the developments. We also highlight certain scams you need to be aware of to keep yourself safe.

Price analysis: ADA, SOL, and MATIC. Our experts take a look at a few altcoins that have been making some interesting moves this week. They analyze the charts and make a case for where the price could possibly go. So make sure you stick around because you don't want to miss this vital information.