A Closer Look at US Inflation and Bitcoin Price Volatility

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• According to experts, the release of the U.S. Consumer Price Index (CPI) data for October is crucial and may impact the overall market momentum, further influencing Bitcoin’s performance.
• The U.S. Federal Reserve’s Consumer Price Index (CPI) and Producer Price Index (PPI) data, set to be released this week, are focal points.
• Past reports have shown that a 3.7% annual increase in September led to a slight downturn in Bitcoin, highlighting the cryptocurrency’s volatility.

Bitcoin is losing strength below $36,500 ahead of U.S. inflation reports: Will the decline continue?

Bitcoin Weakens Ahead of Inflation

The price of Bitcoin erased some of the gains from previous days on Tuesday, indicating cautious investor sentiment ahead of the planned release of critical inflation data. According to experts, the release of the U.S. Consumer Price Index (CPI) data for October is crucial and may impact the overall market momentum, further influencing Bitcoin’s performance.

Additionally, the decision by the U.S. Securities and Exchange Commission (SEC) on twelve spot Bitcoin Exchange Traded Fund (ETF) applications expected between November 9-17 is another critical factor. The decision could function as a positive catalyst for Bitcoin in the coming days, injecting billions of dollars into the BTC market.

On Tuesday, Bitcoin’s price fell below $36,500, indicating cautious investor sentiment ahead of the planned release of critical economic data. The U.S. Federal Reserve’s Consumer Price Index (CPI) and Producer Price Index (PPI) data, set to be released this week, are focal points. The market is particularly awaiting insights into the country’s economic health, with specific concerns about the impact of inflation on the recent market momentum.

Analysts emphasize Bitcoin’s sensitivity to economic indicators, especially the CPI. Past reports showed that a 3.7% annual increase in September led to a slight downturn in Bitcoin, highlighting the cryptocurrency’s volatility.

Meanwhile, a critical factor in Bitcoin’s price, the upcoming CPI report, will show a slowdown in the headline CPI for October, dropping to 3.3% annually. Economists also expect the core CPI to remain stable, reflecting a 0.3% monthly and 4.1% annual increase. Current CPI, according to estimates, still exceeds the U.S. Federal Reserve’s 2% target, indicating a complex economic landscape that could have a significant impact on Bitcoin.

On the other hand, an above-expectation inflation in October could provide the central bank with the opportunity to continue with interest rate hike plans. Notably, higher interest rates tend to have a negative impact on overall financial markets, including risky assets like cryptocurrencies.

Bitcoin Price and Performance

In the last 24 hours, Bitcoin’s price dropped by 1.47%, reaching $36,290 at the time of writing, with a 40.57% increase in trading volume, reaching $18.92 billion. However, the crypto added nearly 6% in the last seven days and around 36% in the last 30 days. This reflects the negative sentiment in the largest crypto asset market. The global crypto market cap dropped by 1.47% to $1.4 trillion, with a 26.21% increase in trading volume, reaching $61.37 billion.

In particular, higher interest rates resulting from CPI data affect investor sentiment towards risky assets, including cryptocurrencies. The upcoming CPI report adds complexity to Bitcoin’s narrative, combined with the potential approval of a Spot Bitcoin ETF. Investors are closely monitoring these developments, recognizing the dynamic and speculative nature of cryptocurrencies.