Bitcoin (BTC) aimed to reach $37,000 during the Wall Street open on November 14, buoyed by the release of the latest United States inflation data, which came in below market expectations. The Consumer Price Index (CPI) data showed slower inflation in October, with the annual change dropping to 3.2% from 4.0% for core CPI. This was a welcome surprise for the market, especially after October’s inflation data overshot versus market consensus.
The stock market immediately responded positively to this news, with the S&P 500 rising by 1.5% on the same day. This was the 31st consecutive month with inflation above 3%, but the data indicated that inflation appeared to be on the decline. Despite being generally skeptical of the Federal Reserve’s policy in the current inflationary environment, financial commentary resource The Kobeissi Letter referred to the latest CPI data as a good result.
On the other hand, Bitcoin’s reaction to the news was only modest, as it revisited an intraday low before rising toward $37,000 while remaining rangebound. Despite this, on-chain monitoring resource Material Indicators noted that liquidity was thin overall, which could fuel volatility. Whales were reportedly quiet on exchanges, while retail investors were seen increasing their exposure to BTC.
The order book liquidity on the largest global exchange, Binance, indicated that upside liquidity around the active trading zone was thin, preventing whales from making large orders without significant slippage. In contrast, smaller order classes were buying BTC, which was strengthening support above the $36,000 threshold.
Related Post
Despite being down around 4% from the 18-month highs seen earlier in the month, market participants continued to express confidence in Bitcoin’s price action. James Van Straten, research and data analyst at crypto insights firm CryptoSlate, argued that comedowns within the broader uptrend were normal and appropriate, indicating that corrections of up to 20% were expected.
Furthermore, Van Straten referred to insights suggested by CryptoSlate on November 13, which indicated that deeper BTC price corrections could still be on the horizon, given that BTC/USD was up 120% year-to-date. In an interview with Cointelegraph, Filbfilb, co-founder of trading suite DecenTrader, also predicted that Bitcoin could experience a significant drawdown before the April 2024 block subsidy halving event.
It’s important to note that market corrections are a normal part of any financial cycle, contributing to the overall health of the market. While Bitcoin institutional inflows have topped $1 billion in 2023 amid a BTC supply squeeze, any investment or trading decision should be made with caution, considering that every move involves risk. Therefore, it is important for readers to conduct thorough research before making any decisions related to investment and trading.
