He bitcoin price It briefly fell below $60,000 for the first time since September. This price drop followed the publication of the Consumer Price Index (CPI) inflation datawhich was higher than expected. These macro data and factors such as the US presidential election are causing uncertainty in the market, leading to a bearish outlook for the flagship cryptocurrency.
Why bitcoin Price Fell Below $60,000
bitcoin price fell below $60,000 after the publication of the US CPI inflation data. The CPI showed that inflation in the United States reached 2.4% in September, higher than expectations. This provided a bearish outlook for btc, suggesting that the Fed's 50 basis point (bp) rate cut may not occur at the November FOMC meeting as expected.
Traders were already pricing in the 50 basis point rate cut that would come after Federal Reserve Chairman Jerome Powell dovish speech after the rate cut at the September FOMC meeting. However, recent developments such as CPI inflation data show that this may not happen. A rate cut is typically bullish for bitcoin as more liquidity is likely to flow into the cryptocurrency ecosystem following such monetary easing policies.
It is worth mentioning that the CPI data is not the only macroeconomic event that has caused bearish sentiment among investors. The US employment report, released last week, also raised questions about the US economy.
He nonfarm payroll data figures was much higher than expectations, leading market participants to question the authenticity of the data and whether the labor market was as strong as Powell had previously suggested.
Meanwhile, the Federal Reserve's September minutes showed that a rate cut in November was far from certain. The Committee stated in the meeting that they will decide their next course of action based on incoming data, such as the CPI data released yesterday.
Therefore, the bitcoin price is reacting to uncertainty in the market as investors remain cautious about allocating so much capital into the flagship cryptocurrency. These investors are dumping their btc holdings out of fear that prices will decline in the short term. Cryptographic analyst Ali Martínez revealed that bitcoin whales have sold or redistributed around 30,000 btc ($1.83 billion) in the last 72 hours.
Presidential elections in the United States and tensions in the Middle East
He united states presidential elections and increasing tensions in the Middle East have also contributed to market uncertainty and bearish outlook for the price of bitcoin. It is typical for the market to experience a lot of volatility as the election approaches. However, it is worth mentioning that pro-cryptocurrency Donald Trump is leading in the polls, providing a bullish outlook for bitcoin.
Meanwhile, there is a possibility that Israel could attack Iran at some point, which it is also doing. bitcoin Investors apprehensive. Meanwhile, Israel continues to attack Hezbollah forces, which will surely also aggravate tensions in the Middle East, especially considering that Iran backs the militia group.
bitcoin price has impressively recovered above the $60,000 support level. At the time of writing, btc is trading at around $60,700, down in the last 24 hours, according to bitcoin/” rel=”nofollow noopener” target=”_blank”>data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
