Bitcoin Holds Steady Despite Surging U.S. Inflation

Bitcoin’s price has been under scrutiny as it clings to the key $26,800 mark. This comes as the United States inflation data continues to exceed expectations. The September print of the Consumer Price Index (CPI) bolstered this trend, coming in at 3.7% year-on-year versus the 3.6% that was expected. Despite these figures, Bitcoin’s price has remained relatively stable.

The CPI data has sparked curiosity about digital market resilience. The core CPI, which excludes volatile food and energy costs, rose 0.3% in September against estimates of 0.3% and 0.3% the previous month. Year-over-year core CPI was 4.1%, matching forecasts.

Surprisingly, the Crypto Market has Remained Stable

The cryptocurrency market has defied expectations, maintaining stability amid these economic uncertainties. Despite the higher-than-expected CPI report, Bitcoin’s price has remained flat, showing resilience in the face of macroeconomic surprises.

The concept of “higher for longer” when it comes to U.S. interest rates is greatly anticipated to result in pressure for risk assets, including cryptocurrencies. However, following the release of the CPI data, the odds of the Federal Reserve hiking rates further at the next meeting of the Federal Open Market Committee (FOMC) on Nov. 1 were minimal at just 7.4% per data from CME Group’s FedWatch Tool.

Despite this initial dip, Bitcoin is fighting hard to stay above key levels and is currently trading at $26,667.48 per CoinMarketCap data. The crypto market moves in the opposite direction to DXY (US Dollar Index). Thus, a reduction in the DXY will be a main aspect to watch amid the volatile market conditions.

At present, the likelihood of a rate hike at the Federal Reserve’s November meeting is estimated to be around 10% by rate traders. However, the probability increases to 30% by the end of the year, as per the data from CME’s FedWatch.

In conclusion, despite the surprising CPI data and its potential implications on interest rates, Bitcoin has shown resilience. This highlights the intricate connection between these emerging financial realms and traditional economies.