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On Wednesday, October 11, the Federal Open Market Committee (FOMC) conducted a meeting to review the inflation numbers as US PPI data came higher than expected flashing a warning signal for the risk-ON assets. Bitcoin and the broader crypto market have come under further selling pressure on Wednesday.
FOMC Considers A Rate Hike
As per reports, the Fed officials are mulling one more rate hike before the year-end. Despite a few opposing opinions, all members unanimously concurred on the critical necessity of sustaining elevated interest rates until substantial evidence verifies the return of inflation to the desired annual rate of 2%.
The summary of the policy meeting from September reads: “A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted”.
Any further decision of monetary tightening could put pressure on equities and the crypto market alike. On Thursday, the U.S. Labour Department will release more data on the Consumer Price Index (CPI) which will provide further clarity on the Fed’s future actions.
The broader crypto market came under pressure with the Bitcoin price slipping under $27,000. At press time, Bitcoin is trading 1.07% down at a price of $26,828 with a market cap of $523 billion.
Bitcoin Futures Open Interest Hint Caution
Santiment, an on-chain analytics platform, has suggested that the rising number of outstanding Bitcoin futures and options might be a factor in the relatively lackluster performance of the cryptocurrency market in October. Historically, when Bitcoin’s open interest surpasses $7 billion, it often signifies a degree of investor greed. Presently, the open interest level is at $6.19 billion.
🤑 The growing amount of outstanding futures & options toward #Bitcoin may be lending to #crypto's failure to launch here in October. Rising open interest, particularly when $BTC starts seeing $7B or more, often signals greed. For now, it sits at $6.19B. https://t.co/DHSaJGvQtI pic.twitter.com/zkE6qbDjN9
— Santiment (@santimentfeed) October 11, 2023
According to the crypto analyst known as Altcoin Sherpa, the present condition of Bitcoin resembles the period characterized by significant volatility, lacking a distinct breakout. The analyst draws a parallel to 2019 when Bitcoin’s price exhibited fluctuation, moving both above and below the 200-day EMA, accompanied by sporadic price spikes. Altcoin Sherpa anticipates that exciting times may arrive in 2024-2025 and advises to survive until then.
All eyes will be on the macro data ahead of this week which can put a better clarity going ahead.
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