From CryptoPotato · By Wayne Jones
At one point in the last 24 hours, Bitcoin rose to about $74,600 after shocks caused by October’s US CPI data contributed to it falling below $73,000 recently.
However, at the time of writing, it was back below $73,000, with market commentary account CryptosRus suggesting that BTC has to overcome three tests for the rebound to hold.
Bitcoin Rebound Faces Further Macro Pressure
The first test has to do with inflation, with October’s headline Consumer Price Index rising above the anticipated 0.3% forecast to hit 0.4% month-over-month, while the core CPI increased by 0.3% against expectations of 0.2%.
That inflation surprise helped to briefly push Bitcoin below $73,000 and even triggered approximately $200 million in long liquidations within 15 minutes. And now, according to Goldman Sachs, there could be rate hikes in December and next year in March, which has added to concerns that restrictive money policies could persist well into 2027.
Higher interest rates tend to discourage speculative positions since they make cheap liquidity less available, and in the case of the OG crypto, according to CryptosRus, the bounce will prove to be valid if it maintains the recovered area of $73,000 and makes higher lows during its advance without a significant rise in forced liquidations. Otherwise, the bounce will fail if another macro shock forces the asset to fall below the recovered level, with increased liquidations.
Secondly, their analysis asked traders to consider how central banks have been choosing gold while crypto waits on the sidelines for marginal capital. According to data the market watchers shared, these banks bought about 321 tonnes of gold in the third quarter of this year, 42% more than the same period last year, and an 8% jump from Q2.
If inflation persists and BTC stabilizes, then, per CryptosRus, investors may revisit it as a scarce, liquid asset, confirming the rebound. But if the precious metal keeps strengthening while its digital counterpart fails to hold its recovery, then it will mean that “reserve diversification is not spilling into crypto,” therefore, again, invalidating the structure.
Institutional Expansion Offers Another Perspective
The next signal is coming from the crypto institutional infrastructure, which continues to grow despite the bear market conditions. So, for example, Deutsche Bank introduced BTC and ETH custody solutions for institutional clients in Europe, while Payward, backed by Kraken, rolled out 24/7 tokenized trading for more than 200 stocks in the UK and European countries.
However, it remains to be seen whether it will all lead to wider participation. But CryptosRus’ bullish interpretation is that BTC is holding up against the tough environment without retesting its lows.