Bitcoin Slips as Hot US Inflation Revives Fed Rate Hike Fears
U.S. consumer price inflation estimates on Wednesday morning exceeded expectations, lowering bitcoin market sentiment. Global market capitalisation fell by over half a percent overnight, as Bitcoin varied between $84,049 and $82,283. On Wednesday morning, the U.S. Bureau of Labour Statistics reported higher-than-expected September consumer price inflation. Annual headline inflation rose to 3.6 percent from 3.4 percent the month before, reaching 3.7 percent. The core component, which rose to 2.5 percent from 2.4 percent the month before, was 2.6 percent. As expected, monthly headline inflation jumped to 0.6 percent from 0.4 percent in August. The core component, predicted to fall to 0.2 percent from 0.3 percent in August, unexpectedly held steady at 0.3 percent.
Recently leaked September Federal Open Markets Committee minutes showed a focus on inflation. Markets expect multiple Federal Reserve rate hikes after the latest inflation update exceeded consensus estimates. CME FedWatch, which tracks interest rate traders’ expectations, predicts a 45.9% chance of a quarter-percent rate increase in October, up from 22.1 percent the day before and 17.7 percent a week earlier. The possibility of a half-percentage rate hike from 3.75-4.0 percent at the December FOMC has increased to 49 percent from 18.7 percent the day before and 13.3 percent a week earlier. Today, the probability of a quarter-percentage rate hike is 48.7%, down from 69.3% yesterday and 66.3 percent last week. In response to a big change in rate hike forecasts, cryptocurrency market capitalisation fell 0.48 percent to $2.78 trillion.
The decrease was accompanied by16 percent lower trade volumes. The preceding 24 hours saw $220 million in liquidations. Long positions were liquidated for $161 million and short positions for $60 million. Bitcoin, the largest cryptocurrency, fell 0.45% overnight to $82,872.52. Bitcoin has lost 5.3 percent year-to-date despite 5.7 percent advances in the preceding 30 days. U.S. Bitcoin Spot ETF products saw net inflows of $176 million on Tuesday, compared to $65 million on Monday. Fidelity Wise Origin Bitcoin Fund led with $103 million inflows, followed by iShares Bitcoin Trust ETF with $66 million. Bitcoin ranks 12th in global asset market capitalisation. The leading cryptocurrency is between 11th-ranked Broadcom and 13th-ranked Saudi Aramco. Ethereum fell 1.3 percent to $2,475.00. The leading alternative coin fell 3.3 percent last week. In contrast to Monday’s $85 million outflow, U.S. Ethereum Spot ETF products saw $25 million inflows on Tuesday.
Greyscale Ethereum Mini Trust ETF received $17 million. According to research, Ethereum ranks 61st in global asset capitalisation. The 4th-ranked BNB dropped 0.12% overnight to $740.19. 5th-ranked XRP, a payments-focused cryptocurrency, fell 0.10 percent overnight to $1.36. The 7th-ranked Solana dropped 0.82 percent overnight to $106.06. On Tuesday, U.S.-listed Solana Spot ETF net outflows remained $1 million. TRON, 8th overall, is up 1.7 percent at $0.3334. Zcash, the 9th-ranked cryptocurrency, rose 2.75 percent overnight to $1,225.32. U.S.-listed Zcash Spot ETF products saw net outflows jump to $5 million on Tuesday from $2 million on Monday. 10th-ranked Hyperliquid fell 0.54 percent overnight to $81.04.
