Bitcoin price drops below $37,000 ahead of US CPI
|- Bitcoin price wiped its weekend gains and dropped to $36,880 ahead of US inflation data.
- Headline CPI rate is expected at 0.1% MoM in October, marking a significant decline from 0.4% in September.
- BTC price yielded 5% weekly gains for holders.
Bitcoin price touched the $37,900 level briefly on November 9 before retreating to $36,880 early on Monday. BTC price corrected lower, wiping out its weekend gains, as traders await US Consumer Price Index (CPI) data.
Also read: BTC rallies to $37,900, fuels bullish outlook among Bitcoin traders
Bitcoin traders await October’s CPI report, BTC trends sideways
Bitcoin rallied closer to $38,000 last week for the first time since May 2022. The asset noted a pullback and dropped to $36,880 as traders awaited Tuesday’s CPI data release. Headline CPI, the inflation figure closely related to shifts in the cost of living, is expected to grow by 0.1% MoM in October. This marks a key shift from the 0.4% increase seen in September.
Last week, in his speech, US Federal Reserve Chair Jerome Powell said that the US central bank won’t hesitate to raise interest rates to ensure price stability, and that they are not confident that the Fed has achieved a sufficiently restrictive stance.
Bitcoin traders are likely to remain cautious as the Core CPI inflation rate, which excludes volatile items such as food and energy and represents the long-run trend in inflation, is projected to remain at 4.1% YoY and 0.3% MoM.
Yohay Elam, analyst at FXStreet, is quoted as saying:
In case data comes out as expected, the drop in headline inflation will likely trigger an immediate positive impact on equities and put pressure on the US Dollar – even if Core CPI remains stubbornly elevated.
Higher inflation tends to increase selling pressure on risk assets like Bitcoin. The BTC price trend is therefore likely to be influenced by the CPI report for October.
Typically, the influence of macroeconomic releases on Bitcoin price volatility is short-lived. Hotter inflation figures could push BTC prices lower in the short term, while the long-term price outlook remains dependent on catalysts like approval of a spot Bitcoin ETF.
At the time of writing, Bitcoin price is $36,929 on Binance.
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