Bitcoin entered a bearish trend on Tuesday, November 14, dropping below $36,500, signaling that investors should be cautious ahead of important economic data releases. The upcoming release of US Consumer Price Index (CPI) data for October is seen as a pivotal moment with potential implications not only for the overall market but also for Bitcoin’s performance. Here are the details…
There are developments that will affect the Bitcoin price
The decision of the US Securities and Exchange Commission (SEC) on a dozen spot Bitcoin Exchange Traded Fund (ETF) applications expected between November 9 and November 17 is also of particular importance. If approved, it could act as a positive catalyst and inject billions of dollars into the Bitcoin market. Analysts emphasize Bitcoin’s sensitivity to economic indicators, especially CPI. Previous examples have shown Bitcoin’s response to economic fluctuations, with a 3.7% annual increase in September causing a slight decline, highlighting the cryptocurrency’s inherent volatility.
The upcoming CPI report, a critical factor for Bitcoin’s price, is expected to reveal a slowdown in October’s headline CPI, falling to 3.3% year-on-year. Economists expect core CPI to remain stable, with a monthly increase of 0.3% and an annual increase of 4.1%. The current CPI still exceeds the US Federal Reserve’s 2% target, indicating a complex economic landscape that could significantly impact Bitcoin. Over the past 24 hours, Bitcoin’s price decreased by 1.47% to $36,454.47, and its trading volume increased by 40.57% to $18.92 billion. Despite the recent decline, Bitcoin has gained about 6% in the last seven days and about 36% in the last 30 days.
Why is the focus on today’s CPI?
Broader market sentiment reflects declines in the largest crypto by market cap. While the total crypto market value decreased by 1.47% to $1.4 trillion, transaction volume increased by 26.21% to $61.37 billion. Higher interest rates resulting from CPI data could impact investor sentiment towards riskier assets, including cryptocurrencies. Bitcoin, which increased its value by approximately 40% after a strong five-week rise, encountered a period of consolidation in the $ 37,000 range.
Another development that affected Bitcoin was the ETF. The recent excitement surrounding the potential approval of a Bitcoin spot ETF has faded, causing investors to shift their focus to today’s Consumer Price Index (CPI) release as a potential catalyst for renewed bullish momentum. As a measure of inflation, CPI plays a very important role. If the CPI exceeds expectations, there will be a sales potential in risky assets such as Bitcoin. Conversely, a lower-than-expected CPI data could boost sentiment and trigger a rally in risk asset markets.
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