Bitcoin is trending lower, moving toward the bottom of the range that was created in July after the crypto hit a multiyear low of $17600. As macro forces continue to dominate global markets, BTC appears poised for more losses in the near future.
Bitcoin (BTC), currently trading at $19,000. There has been a 1% loss and 3% gain in the 24 hours and 7 day, respectively. Others cryptocurrencies follow the same trend, and many are returning their short-term profits other than XRP.
Bitcoin is trapped between global macro forces
According to trading desk QCP Capital, after the Ethereum “Merge”, the migration from Proof-of-Work (PoS) to a Proof-of-Stake (PoS) consensus, was successfully completed, and the sector lost its final bullish narrative. Macro factors alone exert influence.
Bitcoin, Ethereum, or any other cryptocurrency, are becoming more closely linked to traditional assets. They also move more in line with the global economic environment. In that sense, the upcoming Consumer Price Index (CPI) print for September might put additional selling pressure on BTC’s price.
U.S. Federal Reserve (Fed), is trying reduce the inflation rate, which can be measured as the CPI. It is having a detrimental effect on nearly every asset type, with the exception of the U.S. dollars. QCP Capital said:
USD remains bid as the real return on dollars outperforms all other assets YTD. Commodities and Precious Metals showing grim figures (…). The resurgence of macro-strategy has caused correlations to deteriorate across all assets. BTC correlation with equities and gold (positively correlated) at all-time highs (…).
But, they have failed to realize that inflation has been resilient and may continue its upward trend. More information about the macroeconomic state will be revealed by the September CPI print that is due to be released this Thursday. QCP Capital reported:
All eyes will be on Thursday’s CPI print by the Fed, which is uncertain. Selling-side economists predict a core CPI increase of 0.4%/m, and 6.5%/y. This is due to strong shelter inflation.
Bitcoin will trend lower if the Fed continues to raise interest rates. QCP Capital views the “robust” demand in the U.S. job sectors as potentially negative as it contributes to inflation metrics and encourages the financial institution to maintain financial conditions tights.
Bitcoin Whales Help BTC Fall, Check Out These Images
U.S. allies are already pressuring the Fed to stop raising interest rates, but it has not been successful. However, this pressure might contribute to a shift in the financial institution’s stance over the long run.
In the meantime, as the economic situation remains at extreme levels, Bitcoin’s upside potential will continue to be limited. Material Indicators data shows a rise in investors’ selling orders (purple, in the graph below), with ask orders ranging from $100,000 to $1,000,000
This trend will continue for as long as it continues. Any attempts to reclaim previous levels could result in rejection, as has been the case over the last weeks.
#FireChartsCVD shows, that in the past Whales (purple with $100k-$1M of market orders) have exerted more influence. #BitcoinPrice is lower than Mega Whales (brown), with market orders of $1M-10M. This is important to remember when swimming with the pod. pic.twitter.com/eVCqM5UTWo
— Material Indicators (@MI_Algos) October 11, 2022