Bitcoin (BTC) and the broader cryptocurrency market slumped on Monday before bouncing back above $83,000 as volatility returned, while crypto liquidations topped $800 million, including $685 million in long positions, according to CoinGlass data.
According to The Block, BTC fell 2.8% in the past 24 hours, hitting a low of $81,197 before rebounding to cross $83,600 on Tuesday. Ethereum (ETH) reported a larger decline, falling 4.6% to $2,425.
Bitcoin Price Looking At Two Outcomes Following CPI Data
Speaking to Crypto.news, BTSE COO Jeff Mei stated that sustained ETF withdrawals over the past few sessions and uncertainty around the upcoming Consumer Price Index (CPI) data could lead to more volatility. CoinGlass data shows Bitcoin ETFs recorded $89.80 million in outflows on Monday (October 5), followed by $484.90 million on Wednesday, and $244.10 million on Thursday. Inflows of $118.80 million on Tuesday and $21.10 million on Friday did little to stem the loss. Spot Bitcoin ETFs began the current week in the red as well, registering $65.40 million in outflows on Monday.
Mei stated that investors expect the Federal Reserve to keep interest rates steady. However, stronger-than-expected numbers could send BTC plummeting towards $80,000, while softer-than-expected numbers could push the flagship cryptocurrency toward $86,000.
“Right now the consensus is that the Fed will not hike rates a second time, so if inflation comes in higher than expected, Bitcoin could potentially dip back below the $80k mark. Lower inflation will mean the opposite, in which case Bitcoin could rebound to $86k or higher.”
However, Jeff Ko, chief analyst at ViaBTC, believes the markets have already priced in Wednesday’s CPI release. Ko expects a reading of 3.6%-3.7% for headline inflation, and 2.4%-2.5% for core inflation. He also identified Thursday’s Producer Price Index (PPI) and retail sales data as important follow-up releases after the CPI data.
Bitcoin Price Action
Bitcoin (BTC) registered substantial volatility over the past week, reaching an intraday high of $86,969 on Monday (October 5), dropping to a low of $84,973, before closing at $85,756, down 0.87%. Volatility persisted on Tuesday as the price reached $86,677 before losing momentum and settling at $85,554.
Selling pressure intensified on Wednesday as BTC dropped 2.66% to $83,275. A similar scenario played out on Thursday as the price fell to a low of $80,308 before closing at $81,676, down 1.92%.
Price action recovered on Friday, rising 1.08% to reclaim $82,000 and settle at $82,562. BTC rose 0.44% on Saturday and 0.91% on Sunday to end the weekend at $83,679. However, volatility returned on Monday, pushing the price down 2.31% to $81,746. BTC has recovered during the ongoing session and is trading around $83,571, up 2.24%.
Middle East Tensions Back In Focus
Lacie Zhang, a research analyst at Bitget Wallet, has highlighted Bitcoin’s (BTC) ability to stay above $80,000 despite renewed Middle East tensions as evidence of resilience. Zhang stated,
“Sustained support despite oil spikes is constructive for Bitcoin’s near-term trajectory as a digital store of value, although the broader flow picture remains mixed.”
According to Ko, President Trump’s statement ruling out further attacks on Iran before the November 3 midterm elections reduced some risk. However, Strait of Hormuz disruptions and ongoing Houthi attacks on Saudi Arabia remained concerns. The cryptocurrency market’s Fear & Greed Index currently sits in neutral territory at 56. However, Zhang believes persistent ETF outflows could drive price action towards $80,000.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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