Bitcoin 5-Week Bullish Streak Falters; Can CPI Data Perform Wonders?

• Bitcoin saw a notable five-week surge, lifting its value by nearly 40%, only to face a bearish downturn and consolidate around $36k.
• The excitement surrounding a potential spot ETF diminishes as Bitcoin fails to surpass $37k.
• Investors now focus on the upcoming CPI data release as a crucial market influencer.

Following a robust five-week ascent, propelling its value by nearly 40%, Bitcoin (BTC) has encountered a period of consolidation in the $37,000 range. The digital asset appears unable to sustain the bullish rally, with its price now around $36,000 after largely bearish trading in the past 24 hours.

With the excitement surrounding the potential approval of a Bitcoin spot ETF dwindling, investors may shift their focus to Tuesday’s Consumer Price Index (CPI) as a potential catalyst for renewed bullish momentum. Specifically, the U.S. Bureau of Labor Statistics (BLS) is expected to release the CPI data today at 08:00 a.m. local time.

Financial experts anticipate a slowdown in the monthly headline CPI for October, dropping from 0.4% in September to 0.1%, with the year-over-year CPI expected to decrease from 3.7% to 3.3%. 

To provide context, CPI gauges inflation by monitoring the prices of a basket of goods and services that consumers typically purchase in the U.S. As Coin Edition previously noted, in instances where CPI surpasses expectations, there is a potential for a sell-off in risky assets like Bitcoin. Conversely, a lower-than-expected CPI reading could uplift sentiment and trigger a rally in risk-asset markets.

Reportedly, the core CPI, excluding food and energy costs, is projected to remain unchanged from September at 0.3% monthly and 4.1% year-over-year. Therefore, with the anticipated decrease in U.S. CPI coming to fruition, Bitcoin could be reinforcing the bullish rallies it commenced in October, impacting the broader risk asset market.