Bitcoin Targets $37,000 as US Inflation Data Surprises
Bitcoin (BTC) set its sights on $37,000 at the Wall Street open on November 14, thanks to the latest United States inflation data that fell short of expectations. The Consumer Price Index (CPI) reflected slowing inflation in October, giving a boost to BTC price strength.
The CPI came in 0.1% below market forecasts for both year-on-year and month-on-month figures. The annual change was 3.2%, compared to 4.0% for core CPI. This data confirmed a smaller increase in the all items index for the 12 months ending in October, compared to September.
Compared to October, when CPI overshot market consensus, the situation was significantly different. Wall Street stocks immediately reacted positively, with the S&P 500 up 1.5% on the day. The Kobeissi Letter, a financial commentary resource, noted that inflation seems to be on the decline and considered the data a good result.
Bitcoin’s reaction to the CPI data was more modest, with the price revisiting an intraday low before rising towards $37,000. On-chain monitoring resource Material Indicators highlighted that liquidity was thin, which can contribute to volatility. Retail investors were increasing their BTC exposure, while whales remained quiet on exchanges.
While BTC was down around 4% from its 18-month highs, market participants argued that retracements within the broader uptrend were normal and healthy. James Van Straten, a research and data analyst at crypto insights firm CryptoSlate, emphasized that bull market corrections, including drawdowns of up to 20%, are a normal occurrence and have been seen in previous cycles.
Looking ahead, Filbfilb, co-founder of trading suite DecenTrader, predicted that Bitcoin could experience a significant drawdown before the April 2024 block subsidy halving event.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and due diligence before making any investment or trading decisions.