Bitcoin and Ether Fall Slightly as Macro Clouds Loom Over Market
Crypto markets were lower on Monday, trading in sync with traditional markets as investors awaited a key U.S. inflation report due later this week.
The CoinDesk Market Index, a broad-based market index that measures performance of cryptocurrencies, was down 1% over the past 24 hours. Bitcoin (BTC) slid 1.0% and ether (ETH) lost 0.9%.
BTC was trading in a range between $19,200 and $19,600. The price slipped below $20,000 after Friday’s U.S. job growth report showed that hiring was slowing but still robust, suggesting that the Federal Reserve will need to keep tightening monetary policy to bring down inflation.
A report Thursday from the Labor Department is expected to show Consumer Price Index inflation slowing to 8.1% in September from 8.3% in August – but still four times the Federal Reserve’s 2% target for annual price rises.
“Today’s movement reflects the general bearish trend across all markets and is likely influenced by some de-risking ahead of inflation figures,” said Riyad Carey, a research analyst at crypto data firm Kaiko.
There are some bullish signs. Digital asset investment products saw outflows totaling $5 million last week, but the redemptions were fueled by withdrawals from “short” bitcoin products, or those betting on price declines, according to a CoinShares report Monday.
Short-bitcoin investment products saw outflows totaling a record $15 million, according to the report.
“Bearish sentiment is dissipating,” CoinShares wrote.
Ether-focused funds saw minor outflows totaling $2.2 million last week, “highlighting continued hesitancy amongst investors post the Merge,” according to the report.
Macroeconomic clouds loom over the market as investors remain cautious ahead of the CPI report.
“Thursday is likely to be volatile, as the inflation number will provide more information on if or when the Fed will begin to pivot,” Carey said.