(qlmbusinessnews.com Fri, 13th Oct, 2023) London, UK —
Bitcoin Faces Inflation Pressure, Price Hovers Near $26,800 Level
The digital asset market experiences inflation concerns as Bitcoin maintains its position near the crucial $26,800 threshold. Rising inflationary trends pose a challenge to Bitcoin's price, according to market analysts.
Before the Wall Street opening on October 12, Bitcoin's value was holding firm around the significant $26,800 mark, despite recent price volatility. This stability followed a period of two-week lows, which occurred on October 11 and were triggered by the unexpected persistence of inflation in the United States macroeconomic data.
The September Consumer Price Index (CPI) data, released on October 12, further underscored the trend, showing a year-on-year increase of 3.7%, surpassing the anticipated 3.6%. Excluding food and energy prices, the figure stood at 4.1%, aligning with forecasts.
A U.S. Bureau of Labor Statistics official press release affirmed, “The all items index increased 3.7 percent for the 12 months ending September, the same increase as the 12 months ending in August.”
This recent CPI data places the Federal Reserve and U.S. monetary policy in a precarious position, given the current scenario of rising PCE and PPI inflation, as highlighted by The Kobeissi Letter. Market observers have expressed concerns that this situation could result in further pressure on risk assets, including cryptocurrencies, as U.S. interest rates are expected to remain high.
Regarding Bitcoin's outlook, market participants who were already exercising caution saw little reason to anticipate a swift return to positive price movement. Material Indicators, a monitoring resource, identified a significant lack of buying liquidity above the $24,750 level, which had previously played a pivotal role in the market.
Keith Alan, co-founder of Material Indicators, commented on the broader macroeconomic situation, stating, “It’s been a while since we’ve discussed whether good = good or good = bad for BTC price.”
Trading firm QCP Capital described Bitcoin's and Ether's continued downward trajectory as “unabated,” despite several potentially bullish factors in the fourth quarter. “Hopefully the relative underperformance of BTC and ETH to the upside now also means their beta is lower to the downside as well, should CPI come in stronger than expected,” the firm noted in a market update earlier on the same day.
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Disclaimer: This analysis is based on current market conditions and should not be considered as financial advice. Cryptocurrency investments are subject to high market risk, and readers should conduct their research before making investment decisions.
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