Thus, Bitcoin, Ethereum, and other cryptocurrencies are increasing their correlation with traditional assets and moving more and more in tandem with global economic forces. In that sense, the upcoming Consumer Price Index (CPI) print for September might put additional selling pressure on BTC\u2019s price.<\/p>\n
The U.S. Federal Reserve (Fed) is trying to combat the high levels of inflation, as measured by the CPI, by hiking interest rates and reducing its balance sheets. This is causing a negative effect on the value of almost every asset class except for the U.S. dollar. QCP Capital wrote:<\/p>\n
USD continues to remain bid, as real returns on dollar outperforms every other asset class YTD. Commodities and Precious Metals showing grim figures (\u2026). Amalgamation of global macro sentiment has driven correlations across assets back to extremes.\u00a0 BTC correlation with equities and gold (positively correlated) at all-time highs (\u2026).<\/p><\/blockquote>\n
However, their attempts have been futile as inflation is proving resilient and might continue trending upward. The upcoming September CPI print, to be published this next Thursday, will proving more clues into the current macroeconomic situation. QCP Capital said:<\/p>\n
In that regard, all eyes are on the Fed and by extension on CPI print this Thursday, where uncertainty remains high. Sell-side economists are predicting a rise of approximately 0.4% m\/m and 6.5% y\/y in core CPI, carried by strong shelter inflation.<\/p><\/blockquote>\n
If the Fed insists on hiking interest rates, Bitcoin is likely to trend lower in the short term. QCP Capital views the \u201crobust\u201d demand in the U.S. job sectors as potentially negative as it contributes to inflation metrics and encourages the financial institution to maintain financial conditions tights.<\/p>\n
Bitcoin Whales Push BTC Down, Look Out Below?<\/h3>\n
The Fed is already being pressured by U.S. allies to stop their interest rate hike program but to no avail. However, this pressure might contribute to a shift in the financial institution’s stance over the long run.<\/p>\n
In the meantime, as the economic situation remains at extreme levels, Bitcoin\u2019s upside potential will continue to be limited. In short timeframes, data from Material Indicators shows an increase in selling orders from investors (purple in the chart below) with ask orders of between $100,000 to $1 million.<\/p>\n