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CPI joins macro data coming in higher than predicted, something not conducive to BTC price upside, Bitcoin analysts continue to imply.
Bitcoin (BTC) was clinging to the key $26,800 mark prior to the Oct. 12 Wall Street open as United States inflation data continued to beat expectations.
BTC/USD 1-hour chart. Source: TradingView
BTC price reacts as CPI surpasses predictions
Data from Cointelegraph Markets Pro and TradingView showed BTC price volatility staying muted after two-week lows seen the day prior on Oct. 11.
These had come thanks to U.S. macroeconomic data revealing persistent inflation that continues to take markets by surprise.
On Oct. 12, the September print of the Consumer Price Index (CPI) bolstered the trend, coming in at 3.7% year-on-year versus 3.6% expected. Less food and energy, the tally was 4.1% — matching forecasts.
“The all items index increased 3.7 percent for the 12 months ending September, the same increase as the 12 months ending in August,” an official press release from the U.S. Bureau of Labor Statistics confirmed.
“The all items less food and energy index rose 4.1 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending September, and the food index increased 3.7 percent over the last year.”
Reacting, financial commentary resource The Kobeissi Letter nonetheless emphasized the tight spot in which monetary policy — and the Federal Reserve — now found itself.
“We have PCE and PPI inflation rising with CPI inflation above expectations,” it wrote on X (formerly Twitter).
“How can the Fed cut interest rates any time soon?”
The concept of “higher for longer” when it comes to U.S. interest rates is broadly expected to result in pressure for risk assets, including crypto.
Following CPI, the odds of the Fed hiking rates further at the next meeting of the Federal Open Market Committee (FOMC) on Nov. 1 were nonetheless minimal at just 7.4% per data from CME Group’s FedWatch Tool.
Fed target rate probabilities chart. Source: CME Group
Analyst on Bitcoin vs. macro: “Bad = bad”
Turning to Bitcoin itself, already cautious market participants had little reason to expect a return to the upside in the short term.
Related: BTC price rally in doubt? Bitcoin young supply echoes 2022 bear market
Popular trader Skew continued to flag $26,800 as the zone for bulls to flip to support.
$BTC 4H
CPI later today going to see how LTF structure develops
clear 4H demand area here & $26.8K remains important for control
If buyers can reclaim & hold $26.8K will look for some kind of 4H EMA trend test or reclaim
staying more cautionary till confirmations pic.twitter.com/58BKDZyLBj— Skew Δ (@52kskew) October 12, 2023
Monitoring resource Material Indicators revealed a lack of bid liquidity much above $24,750, a key level from the past two quarters.
Looking at #BTCUSDT on #FireCharts
1. Bid liquidity laddered down to the LL at $24,750
2. Yellow stopped their TWAP sell strategy
3. Purple Whales have been selling pic.twitter.com/4cant18F4o— Material Indicators (@MI_Algos) October 12, 2023
“It’s been a while since we’ve discussed whether good = good or good = bad for BTC price,” co-founder Keith Alan added in commentary on the macro aspect ahead of CPI.
“I’m no economist, but based on yesterday’s reports, the overall economic outlook and geopolitical tensions, I’m going to go with bad = bad.”
Continuing, trading firm QCP Capital described an “unabated” downhill trajectory on Bitcoin and the largest altcoin, Ether (ETH), coming despite various potential bullish factors in Q4.
“Hopefully the relative underperformance of BTC and ETH to the upside now also mean their beta is lower to the downside as well, should CPI come in stronger than expected,” it wrote in a market update earlier on the day.
“Otherwise, we continue looking at the key levels of 25-26k on the downside, and 29-30k on the topside as critical to determine the next trend.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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