Bitcoin fell to its lowest point in more than a week on Monday as investors continued to examine strong jobs data from Friday that sent risk assets, including cryptocurrencies, even further into the red.
The largest cryptocurrency by market capitalization, according to Coin Metrics, was down almost 1.5% at $19,178.43. Ether’s cost dropped by 1% to $1,304.82.
As we approach Thursday’s CPI announcement, there appears to be some trepidation and derisking across all markets, according to Kaiko research analyst Riyad Carey. There is a possibility of increasing the price of Bitcoin in the coming months, since there haven’t been many catalysts involving cryptocurrencies specifically in recent weeks. Thursday will probably be pretty turbulent as well, with the inflation rate dictating whether prices go up or down.”
On Thursday, the Bureau of Labor Statistics will release the September consumer price index. The headline CPI will increase by 0.3% per month and 8.1% annually, predict the economists surveyed by Dow Jones. Investors closely follow these data in search of cues regarding the Federal Reserve’s next move in its fight against inflation.
James Butterfill, the head of research at CoinShares, claims that there is a growing narrative that central banks are starting to make policy errors. He cites Bank of England interventions, concerns about the Fed dot plot, and the European Central Bank’s cautious interest rate increases as examples.
He said that a lot of our clients have said they don’t want to buy bitcoin right now but that they will expand their positions as soon as the Fed alters its course. The two most important data points this week will be the FOMC minutes and the CPI data beat/miss on Wednesday; a whiff of dovishness is probably going to be good for crypto assets.
Despite the concern that investors are feeling, bitcoin volatility has been exceptionally low recently even though it still has a positive association with equities.
Kaiko claims that for the fourth consecutive Sunday, Bitcoin closed within the $19,000 area on Sunday. The data source suggested that the high volatility regime that the cryptocurrency market has seen since its major collapse in June may be ending in a study report on Monday based on hourly returns.
According to the paper, the hourly returns on bitcoin and ether rose to between 3% and 5% during the crypto credit crisis but have since fallen to between 1% and 2%.
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