- Impact of Low CPI Numbers on Bitcoin Market
- Higher CPI Numbers Could Trigger BTC Bears
- Expert Opinions and Current Market Situation
Pav Hundal, lead analyst at Swyftx, comments on possible scenarios for the Bitcoin market amid changing Consumer Price Index figures.
Impact of Low CPI Numbers on Bitcoin Market
Analyst Pav Hundal suggested that Year-on-Year (YoY) Consumer Price Index (CPI) numbers could trigger a volatile environment for crypto traders. According to Hundal, the crypto market has high investor confidence, which could be reinforced by low CPI numbers ahead of a Bitcoin rally. The Consumer Price Index data tracks inflation rates for the US economy. According to the analyst, low CPI numbers could initiate anticipation for a larger rate cut later in the month. Historically, investors view risk-on assets like Bitcoin as more attractive when interest rates are cut, whereas traditional assets like bonds and term deposits become less appealing.
Higher CPI Numbers Could Trigger BTC Bears
On the other hand, Hundal also warned about the possible outcomes if inflation rates increase contrary to market expectations. Higher-than-expected inflation numbers could surprise investors, making perceived riskier assets like Bitcoin less attractive and triggering a sell-off. "But the unimaginable keeps happening, and if it does, you'd expect to see very heavy selling of risk assets.", noted Hundal.
Expert Opinions and Current Market Situation
At the time of publication, Bitcoin is trading at $56,571, having shed off 0.55% in the last seven days and 1.34% in the last 24 hours, according to data from crypto price tracking website Coinmarketcap. Data from futures market analysis platform CoinGlass shows that Bitcoin’s imminent recovery to $60,000 could cause a $1.6 billion liquidation on short positions. Hundal also highlighted that the Bitcoin market is stuck in indecision as investors are unsure what to expect. He cited the $1.3 billion increase in Bitcoin open interest seen since September 7th, which has split the market on where the price is headed. Crypto enthusiast AlphaBTC noted that the market was anticipating good numbers on the Consumer Price Index, Producer Price Index (PPI), and job data. He referenced the projections for the spike in inflows witnessed on spot Bitcoin exchange-traded funds (ETFs) on September 10th, when spot Bitcoin ETFs recorded the highest cumulative net inflows since August 26th, worth $117 million.
Thus, the future of Bitcoin in the near term remains uncertain, with much depending on the expected inflation numbers and investor reactions to them.
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