Bitcoin (BTC) was trading at the crucial $26,800 level on October 12 as Wall Street opened, with United States inflation data continuing to exceed expectations.
BTC price volatility remained low after hitting two-week lows on October 11 due to surprising inflation data in the US. The latest blow came from the Consumer Price Index (CPI) for September, which showed a 3.7% year-on-year increase, exceeding the expected 3.6%. Excluding food and energy, the CPI was at 4.1%, in line with forecasts.
The increasing inflation numbers have put the Federal Reserve in a difficult position. The Kobeissi Letter, a financial commentary resource, highlighted the challenges faced by monetary policy and the Fed, questioning the possibility of interest rate cuts in the near future.
The expectation of “higher for longer” interest rates in the US has also added pressure on risk assets, including cryptocurrencies. Despite the CPI data, the chances of the Fed raising rates at the next meeting of the Federal Open Market Committee (FOMC) on November 1 were minimal, at just 7.4% according to CME Group’s FedWatch Tool.
In terms of Bitcoin, traders remained cautious about a potential upside in the short term. The key support level for bulls to watch was $26,800, as suggested by popular trader Skew. Material Indicators, a monitoring resource, also pointed out a lack of bid liquidity above $24,750, a crucial level from the past two quarters.
Analysts and market participants have expressed concerns about the correlation between Bitcoin and macroeconomic factors. Keith Alan, the co-founder of a trading firm, highlighted the potential impact of economic outlook and geopolitical tensions on Bitcoin’s price. QCP Capital, another trading firm, noted the ongoing downward trend for Bitcoin and Ether (ETH), despite potential bullish factors in the fourth quarter.
Overall, Bitcoin’s price remained uncertain as it reacted to US inflation data and macroeconomic factors. Traders and analysts were cautious about the short-term outlook, with support and liquidity levels being closely monitored to determine the next trend.
Please note that this article does not provide investment advice or recommendations. Investors should conduct their own research and exercise caution when making financial decisions.