Bitcoin hovered around $61,000 on October 10, following the release of the latest US Consumer Price Index (CPI) data. The September CPI came in higher than expected, signaling persistent inflation pressures in the US economy. According to the US Bureau of Labor Statistics (BLS), the index increased by 2.4% over the past year.
At the same time, US jobless claims surged to their highest levels since June 2023, creating a dilemma for the Federal Reserve. This divergence between rising inflation and growing unemployment has left economists questioning the Fed’s next move.
A “Nightmare” Scenario for the Federal Reserve
The mixed data has complicated matters for the Federal Reserve, with analysts labeling the situation a “nightmare” due to its conflicting nature. While the central bank recently cut interest rates by 50 basis points, traders are now speculating on whether further rate cuts are likely.
Crypto trader Michaël van de Poppe suggested that rumors of quantitative easing (QE) and more rate cuts could gain traction, potentially benefiting Bitcoin. Market indicators now show an 87% chance of a 0.25% rate cut at the Fed’s November meeting, according to CME Group’s FedWatch Tool.
Selling Pressures Weigh on BTC Price
Despite optimism around potential Fed actions, Bitcoin’s price faced renewed selling pressures, partly attributed to movements of Bitcoin linked to the Silk Road case. QCP Capital highlighted the volatility, noting that while US equities rallied, crypto markets showed less enthusiasm.
“Selling pressures reignited, possibly due to news of more Silk Road BTC selling and PlusToken ETH selling,” QCP Capital stated. However, they remain hopeful for a bullish rally, with Bitcoin holding strong at the $60,000 support level.
Hopes for an “Uptober” Rally
Despite the current volatility, many analysts expect Bitcoin to recover before the end of the month. Historically, October has delivered an average of 23% gains for Bitcoin, leading traders to remain optimistic about the near-term price outlook.
With uncertainty surrounding the Fed’s next move, Bitcoin’s fate hangs in the balance as traders watch key support levels closely.
