From Decrypt · By Decrypt Agent
In brief
Bitcoin dipped to an intraday low under $81,000, extending losses after hotter-than-expected U.S. inflation data revived bets on a Fed rate hike.
HashKey's Tim Sun said slowing demand from spot ETFs and corporate Bitcoin treasuries explains the stalled rally more than macro factors alone.
Algoz's Stephen Wundke expects Bitcoin to trade between $76,000 and $83,000 for the rest of October unless a clear catalyst emerges.
Bitcoin dipped below $81,000 on Thursday, extending its slide a day after U.S. consumer prices rose faster than expected and revived bets on another Federal Reserve rate hike.
The leading cryptocurrency is currently trading at $81,002, per CoinGecko data, down 2.7% over the past 24 hours and 2.5% over the past week, after slipping to an intraday low of $80,444.
Consumer prices rose 3.7% in the year to September, Decrypt reported on Wednesday. Prices rose 0.6% over the month, the largest monthly increase in five months, driven mainly by energy costs tied to the war with Iran, The New York Times reported.
BitcoinBTC · USD$80,992−1.6%Oct 8Oct 10Oct 12Oct 13Oct 15$84.2k$83.0k$81.8k$80.6k24h HighHigh$83,79124h LowLow$80,444VolVol$1.9BMarket projectionsOdds by MyriadThis weekAbove $80,000Above $80k69% chance→Buy Bitcoin with USDTPowered by JupiterPrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →Traders' odds of a Fed rate hike this month jumped to 43% from 24% after the report, the Times said, though federal funds futures still point to December for the next increase. The Fed raised rates to a range of 3.75% to 4% in September.
CME FedWatch put the odds of an October hike at 29.3% on Thursday, up from 17.7% a week earlier, while traders on prediction markets Myriad and Polymarket priced it at 28%. Polymarket traders put the chance of a December hike at 79%. (Disclosure: Myriad is a prediction market operated by Decrypt's parent company, Dastan.)
Stephen Wundke, strategy and revenue director at quantitative investment firm Algoz, argued that those probabilities feed directly into Bitcoin's price. "On the bullish side as long as BTC stays above $79,500 we can keep the dream alive," Wundke told Decrypt.
Inflation has now run above the Fed's 2% target for 66 straight monthly readings, the longest streak this century, according to a CNBC analysis. "They're starting to accept high inflation as just a fact of life," Cleveland Fed President Beth Hammack wrote in a LinkedIn post last week.
Myriad: What's the Fed's next move? Click to make your prediction.
Those pressures are only part of the picture, Tim Sun of HashKey Group told Decrypt. Rising rate hike expectations, a stronger dollar and a pullback in AI tech stocks have weighed on Bitcoin on the surface, he said, "however, the deeper reason lies in the changing structure of incremental capital."