Bitcoin Slides Near 11-Week Low as US Inflation Tops Forecasts
October CPI data came in hotter than expected, rattling crypto and equity markets and raising Fed rate-hike odds for December.
Bitcoin dropped toward its lowest level in nearly 11 weeks Wednesday after a stronger-than-anticipated U.S. consumer price index report for October unsettled financial markets broadly, with both cryptocurrencies and equities selling off in the immediate aftermath of the data release.
The inflation reading came in above Wall Street consensus estimates, a result traders quickly characterized as discouraging for risk assets. The report reinforced expectations that the Federal Reserve retains room — and incentive — to raise interest rates further, with market pricing shifting toward a quarter-point hike at the central bank's December policy meeting.
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Higher interest rates tend to pressure speculative and growth-sensitive assets disproportionately. Bitcoin, which surged during the era of near-zero borrowing costs, has remained sensitive to shifts in monetary policy expectations, and Wednesday's move reflected that dynamic as investors reassessed the trajectory of Fed tightening.
U.S. stock indexes also declined in initial trading following the CPI release, underscoring how the inflation surprise rippled across asset classes simultaneously rather than being isolated to the digital-asset sector. The correlation between Bitcoin and equities, a hallmark of recent macro-driven trading environments, appeared to reassert itself in the immediate reaction.
Whether the selloff proves short-lived will likely depend on subsequent Fed communications and any additional economic data that could either reinforce or temper the December rate-hike narrative. Continue reading at Cointelegraph.
