30s Summary

Bitcoin dropped to around $71,000 amid disappointing U.S. economic data. Concerns were raised as the Personal Consumption Expenditures (PCE) and Consumer Price Index (CPI) showed high inflation figures. The drop in BTC value led to speculations about potential interest rate cuts, expected to be decided by the Fed on November 7th. Analysts predict more market volatility following expected U.S. nonfarm payrolls figures. Additionally, significant Bitcoin holders (“Bitcoin whales”) have been reducing their exposure amid a market filled with volatility. Despite the drop, Bitcoin’s value was up by over 13% for October.

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Bitcoin, also known as BTC, saw a drop to around $71,000 as trading began on Wall Street on October 31st. This seemed to be due to disappointing U.S. economic figures, which weren’t enough to boost Bitcoin’s value.

BTC’s value had experienced an ongoing decrease, dropping about 1.6% on that day. Analysts were concerned as key economic metrics (like the Personal Consumption Expenditures or PCE index) released in September were generally in line with what was expected. However, this didn’t spark any volatility in the market. The inflation issues of both the PCE and CPI indexes are still pretty high, though, and didn’t lower as much as desired.

This led to speculations about potential interest rate cuts by officials. In fact, a decision about this is expected to be made on November 7th. According to data from a tool called FedWatch, it looks like the expectation for a 0.25% cut next week remained at 96% after the announcement of these data.

Michaël van de Poppe, a trader, analyst and entrepreneur, suggested that the volatility might spike with the release of U.S. nonfarm payrolls figures on November 1st.

Looking at Bitcoin’s trading behavior, it seemed that “Bitcoin whales” (people who own significant amounts of Bitcoin) have been reducing their Bitcoin exposure in the past 24 hours. This was quite different compared to the previous week, when there was a general accumulation of Bitcoin across “whale cohorts”.

Daan Crypto Trades, a popular commentator on this issue, noted that a lot of long-term investments were being let go. “Over $500 million in Open Interest has already disappeared with just a -2% price move,” he stated.

He also predicted that the market would probably experience even more volatility in the coming week. Current information revealed the Bitcoin price chipping away at the amount of money people were willing to pay (bid-side liquidity), pushing Bitcoin closer to $70,000.

Despite the drop in price on October 31st, Bitcoin’s value was still up by more than 13% for the month.

Source: Cointelegraph