Bitcoin (BTC) Slides Below $60K as US Inflation Data Surprises

Bitcoin Slips Below $60K Amid US Data Shocks – Is More Volatility Ahead?

On Thursday, October 10, BTC declined by 0.52%, following a 2.50% loss from the previous session to close at $60,313. Significantly, BTC slid to a session low of $58,926 before reclaiming the $60,000 handle.

Rising inflation and weaker labor market data left BTC on shaky ground, as Fed rate cut bets wavered.

US Economic Indicators Send BTC Sub-$60,000

On Thursday, the highly anticipated US CPI Report and the weekly jobless claims impacted BTC demand. The core annual inflation rate unexpectedly increased from 3.2% in August to 3.3% in September. Hotter inflation could temper bets on multiple Q4 2024 Fed rate cuts, possibly impacting demand for riskier assets.

However, the hotter inflation print coincided with weaker-than-expected labor market data. Initial jobless claims jumped from 225k (week ending September 27) to 258k (week ending October 5). The jobless claims data contrasted with September’s Jobs Report, fueling speculation about a likely revision to September’s numbers.

While the inflation figures sent BTC to a session low, the jobless claims data likely supported a BTC return to the $60,000 level. The Fed could be inclined to cut rates, prioritizing labor market stability over inflation concerns.

Weaker labor market conditions could slow wage growth, possibly reducing disposable income and consumer spending. Downward trends in consumer spending may dampen inflation while also impacting the economy. Private consumption contributes over 60% to the US GDP.

US BTC-Spot ETF Extends Outflow Streak

On Wednesday, October 9, the US BTC-spot ETF market reported net outflows of $40.6 million. Concerns about the US government possibly selling 69k BTC impacted flow trends. The US BTC-spot ETF market extended its net outflow streak to three consecutive sessions on Thursday. According to Farside Investors:

• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $33.8 million.
• ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $30.3 million
• Bitwise Bitcoin ETF (BITB) reported net outflows of $6.2 million.

Excluding iShares Bitcoin Trust (IBIT) and flows, the US BTC-spot ETF market reported net outflows of $70.3 million.

US Economic Calendar: Producer Prices and Consumer Sentiment

On Friday, October 11, US producer prices and the Michigan Consumer Sentiment Index will influence market risk sentiment. Economists expect producer prices to soften slightly in September while predicting consumer sentiment to improve. Higher producer prices and improving consumer sentiment may lower bets on multiple Q4 2024 Fed rate cuts, possibly impacting BTC demand.

Beyond the US economic calendar, investors should also monitor US government-related news. Reports of the government planning to sell 69k BTC seized from the Silk Road could dampen BTC demand on concerns about oversupply. Recent US BTC-spot ETF outflows could leave BTC more sensitive to supply risks.

Outlook

Investors should remain alert. Oversupply risk, the US economic calendar, and updates from the Middle East could influence BTC price trends.

An escalation in the Middle East conflict could trigger a flight to safety, possibly dampening BTC demand. Investors should continue tracking ETF flow trends as they could influence near-term supply-demand trends. Stay updated with our latest news and analysis to manage your BTC and crypto exposures.

Technical Analysis

Bitcoin Analysis

BTC remains below the 50-day EMA while holding above the 200-day EMA, affirming bearish near-term but bullish longer-term price signals.

A break above the $60,365 resistance level would support a move to the 50-day EMA. Furthermore, a breakout from the 50-day EMA could bring the $64,000 resistance level into play.

Investors should consider US government-related transfer news, the Middle East, the US economic data, and BTC supply-demand trends.

Conversely, a drop below the 200-day EMA could give the bears a run at $57,500.

With a 42.68 14-day RSI reading, BTC could fall to the $57,500 level before entering oversold territory.

Ethereum Analysis

ETH remains well below the 50-day and 200-day EMAs, confirming bearish price trends.

An ETH breakout from the $2,403 resistance level could bring the 50-day EMA into play. Furthermore, a break above the 50-day EMA may give the bulls a run at the $2,664 resistance level.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH drop below $2,250 could signal a fall toward the $2,124 support level.

The 14-period Daily RSI reading, 42.84, indicates an ETH fall to the $2,124 support level before entering oversold territory.