S&P 500 Crashes: Will BTC Price Dump After New CPI Data?

As the S&P500 retreats from its recent all-time high, Bitcoin (BTC) price is retesting $60k as Bitcoin CPI shock rips through the market.

As the BTC price hovers around the low $60,000 mark , investors are in a painful six-month lull.

Glassnode’s James Check noted this week that Bitcoin is in a “sell-side risk ratio” stuck in a “low liquidity zone,” signaling a market frozen in place without significant movement.

“Investors demand a new price range to re-awaken supply.” – James Check

Veteran traders are in standby mode, scanning for clear price signals before making big moves. Making matters worse, US stocks took a hit Thursday, driven by higher-than-expected inflation, hinting at rate changes from the Fed.

BTC Price Standstill: Today’s CPI Report Comes in Hot

The Fed's worst nightmare has begun:

1. Core CPI inflation rises to 3.3%, the first increase since March 2023

2. 258,000 people filed for unemployment this week, above expectations of 230,000

Once the September jobs report is revised sharply lower, it will reveal the Fed's…

— The Kobeissi Letter (@KobeissiLetter) October 10, 2024

Last month saw a 0.2% rise in consumer prices, outpacing Wall Street’s 0.1% prediction. The annual increase hit 2.4%, raising alarms about inflation’s return. Adding to the mess, unemployment claims unexpectedly surged to 258,000, marking the highest tally since June 2023.

Traders now reckon there’s a 15% shot that the Fed will keep rates unchanged in November, as per the CME FedWatch Tool. Just a week back, a rate hold was off the table, with everyone braced for a 25-basis-point cut.

As for the BTC price,  our prediction last month proves that Bitcoin’s last hurdle will be the 2024 US presidential election.

The “banana zone” for crypto (i.e., when liquidity pours into the market) is unsustainable.

Short-term Bitcoin holders, those who’ve bought in the last 155 days, are facing unrealized losses with a realized price of $62,426—above the current trading level. Despite this, some analysts predict an imminent breakout for the BTC price, noting Bitcoin’s tight price range and a recent escape from a “ falling wedge ” pattern, hinting at upward momentum.

Meanwhile, investor Mike Alfred downplays the current price fluctuations below $73,500, describing them as inconsequential in the grand scheme of Bitcoin’s market trajectory.

“All this Bitcoin price action under $73,500 is basically just noise,” Alfred told CoinTelegraph. It’s just loose change bouncing around the washing machine.”

Looking Ahead For Bitcoin Post-CPI in October

With inflation and unemployment data wrecking the BTC price, traders are keenly watching for cues that might propel Bitcoin into a new phase.

RIP Uptober. The next rate cut meeting is in early November, the same time as the elections; we’re set for a wild Q4.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.