Bitcoin faces a high-stakes November – CPI shock collides with FOMC

Key Takeaways

Is Bitcoin showing signs of a bottom?

Bitcoin shorts are being squeezed and spot-led demand is stepping in, but macro uncertainty and sticky inflation keep the trend far from guaranteed.

What could drive Bitcoin into a new ATH?

Whales are front-running a bullish leg, but momentum may favor a break rather than a clean run.

Shorts are getting squeezed, crypto market cap is up 4%, and sentiment is edging back toward neutral. In this setup, Bitcoin [BTC] retesting $111k shows spot-led demand stepping in, not just speculative flows. 

But does this really signal that BTC has put in a bottom?

ATH in sight, but CPI and FOMC loom large for BTC

The macro shock continues to put Bitcoin’s Q4 tailwinds to the test. 

The Bureau of Labor Statistics (BLS) will release the Consumer Price Index (CPI) report on the 24th of October, and the timing hits risk assets at the worst possible moment.

The report comes just five days before the FOMC.

With inflationary pressure still on the table and the U.S.-China trade war lingering, economists are penciling in a 3.1% year-over-year rise, up from last month. Simply put, the market expects consumer prices to climb.

Source: TradingEconomics

Add to that the labor market report still under wraps due to the shutdown. 

For context, one of the key catalysts behind Bitcoin’s run to $125k in early October was U.S. macro uncertainty, with the market pricing in a weak labor market to give the Fed room for rate cuts at the next FOMC. 

Now that catalyst is gone and inflation remains sticky. Therefore, macro volatility is far from over. Even if the Fed cuts rates, risk assets might not get a clean bullish lift, repeating the post-cut cycle we saw in September.

Whales front-run while Bitcoin braces for volatility

September’s Fed rate cut barely moved the needle for Bitcoin.

BTC dumped 8% in the week after the cut as inflation printed +0.2% MoM.

Even though BTC punched through $125k to a new ATH, the rally lacked follow-through, with fear keeping bulls sidelined and momentum fading.

Given the setup, Bitcoin’s run into price discovery could hit a ceiling. However, market positioning suggests whales are front-running a bullish leg, with perp markets leaning long and leverage stacking up.

Source: CoinGlass

In short, Bitcoin’s November run is anything but linear.

With less than a week to the FOMC, the market is pricing in a near-certain rate cut, expecting the Fed to lean on weak labor data for another 25bps chop, despite sticky inflation, just like in September. 

But a clean bull run isn’t guaranteed. 

Rising longs and a stacked liquidity cluster could make BTC’s push into an ATH messy, turning the next few days into a “high-stake” break-or-make setup, with momentum currently skewed toward the break side.