BTC Outlook: Key CPI Data and ETF Flows Could Trigger Volatility Below $60K

Bitcoin Test Support at $60,000

On Wednesday, October 9, BTC slid by 2.50%, following a 0.12% decline from the previous session to close at $60,628. The drop mirrored the broader crypto market, which fell by 2.23% to a total crypto market cap of $2.070 trillion.

Speculation About a US Government Sale Impacts on BTC Demand

On Wednesday, concerns about a possible US government sale of BTC continued to impact demand. A Supreme Court ruling on forfeitures relating to the Silk Road raised expectations of excess BTC supply. The Supreme Court rejected an appeal against a forfeiture ruling, allowing the US government to sell 69k BTC.

The US government seized the 69k BTC in November 2020 after shutting down the Silk Road darknet market in 2013. The 69k BTC relates to a hacker who had stolen the crypto from the Silk Road before the US government shut it down. The US government also seized BTC from the Silk Road servers and its founder, Ross Ulbricht, aka Deadly Pirate Roberts.

According to Arkham Intelligence, the US government currently holds 203,239 BTC in its crypto stockpile, equivalent to $12.28 billion.

US BTC-Spot ETF Flows Raise Oversupply Risk

On Tuesday, October 8, the US BTC-spot ETF market saw net outflows of $18.6 million. Outflows continued on Wednesday, October 9, affecting buyer demand for BTC.

According to Farside Investors,:

• ARK 21Shares Bitcoin ETF (ARKB) saw net outflows of $44.5 million.
• Excluding iShares Bitcoin Trust (IBIT) and Bitwise Bitcoin ETF (BITB) flows, the US BTC-spot ETF market reported net outflows of $44.5 million.
• The spot ETF market experienced a material shift in demand going into October.
• Outflows for October currently sit at $57.7 million after reporting inflows of $1,263 million in September.

The US government’s BTC sale could materially impact price trends if the US BTC spot ETF market cannot absorb the excess supply.

US Economic Calendar: CPI Report in Focus

On Thursday, October 10, the US CPI Report could influence US BTC-spot ETF flows and BTC price trends. Economists forecast the US inflation rate to ease from 2.5% in August to 2.3% in September.

Softer inflation could boost bets on multiple Q4 2024 Fed rate cuts, supporting demand for riskier assets, including BTC and related products. Positive sentiment could push BTC toward $65,000. Conversely, hotter-than-expected inflation could lower expectations of Fed rate cuts, potentially sending BTC below $60,000.

Outlook

Investors should remain alert. Oversupply risk, the US CPI Report, 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 also track ETF inflows as they could influence near-term supply-demand trends. Stay updated with our latest news and analysis to manage your  crypto exposures.

Technical Analysis

Bitcoin Analysis

BTC sits below the 50-day EMA while hovering above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

A break above the 50-day EMA could signal a move toward the $64,000 resistance level and October 7’s high of $64,482. Furthermore, a breakout from $64,482 may bring the $69,000 resistance level into play.

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

Conversely, a break below the $60,365 support level and the 200-day EMA could indicate a fall toward $57,500.

With a 44.84 14-day RSI reading, BTC may drop to the $57,500 level before entering oversold territory.

Ethereum Analysis

ETH hovers below the 50-day and 200-day EMAs, affirming bearish price signals.

An ETH break above the $2,403 resistance level could support a move toward the 50-day EMA. Furthermore, a breakout from the 50-day EMA may bring the $2,664 resistance level into play.

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

Conversely, an ETH fall through $2,250 could give the bears a run at the $2,124 support level.

The 14-period Daily RSI reading, 43.18, suggests an ETH drop to the $2,124 support level before entering oversold territory.