Bitcoin faces a high-stakes November – CPI shock collides with FOMC

Key Takeaways

Is Bitcoin exhibiting indicators of a backside?

Bitcoin shorts are being squeezed and spot-led demand is stepping in, however macro uncertainty and sticky inflation maintain the pattern removed from assured.

What might drive Bitcoin into a brand new ATH?

Whales are front-running a bullish leg, however momentum might favor a break somewhat than a clear run.

Shorts are getting squeezed, crypto market cap is up 4%, and sentiment is edging again towards impartial. On this setup, Bitcoin [BTC] retesting $111k reveals spot-led demand stepping in, not simply speculative flows. 

However does this actually sign that BTC has put in a backside?

ATH in sight, however CPI and FOMC loom giant for BTC

The macro shock continues to place Bitcoin’s This fall tailwinds to the check. 

The Bureau of Labor Statistics (BLS) will launch the Shopper Worth Index (CPI) report on the twenty fourth of October, and the timing hits danger belongings on the worst doable second.

The report comes simply 5 days earlier than the FOMC.

With inflationary strain nonetheless on the desk and the U.S.-China commerce struggle lingering, economists are penciling in a 3.1% year-over-year rise, up from final month. Merely put, the market expects client costs to climb.

Supply: TradingEconomics

Add to that the labor market report still under wraps as a result of shutdown. 

For context, one of many key catalysts behind Bitcoin’s run to $125k in early October was U.S. macro uncertainty, with the market pricing in a weak labor market to offer the Fed room for price cuts on the subsequent FOMC. 

Now that catalyst is gone and inflation stays sticky. Due to this fact, macro volatility is way from over. Even when the Fed cuts charges, danger belongings may not get a clear bullish elevate, repeating the post-cut cycle we noticed in September.

Whales front-run whereas Bitcoin braces for volatility

September’s Fed price reduce barely moved the needle for Bitcoin.

BTC dumped 8% within the week after the reduce as inflation printed +0.2% MoM.

Although BTC punched via $125k to a brand new ATH, the rally lacked follow-through, with worry maintaining bulls sidelined and momentum fading.

Given the setup, Bitcoin’s run into value discovery might hit a ceiling. Nonetheless, market positioning suggests whales are front-running a bullish leg, with perp markets leaning lengthy and leverage stacking up.

Supply: CoinGlass

In brief, Bitcoin’s November run is something however linear.

With lower than every week to the FOMC, the market is pricing in a near-certain rate cut, anticipating the Fed to lean on weak labor information for an additional 25bps chop, regardless of sticky inflation, similar to in September. 

However a clear bull run isn’t assured. 

Rising longs and a stacked liquidity cluster might make BTC’s push into an ATH messy, turning the following few days right into a “high-stake” break-or-make setup, with momentum presently skewed towards the break aspect.