Bitcoin Nears 11-Week Low Following Discouraging US CPI Inflation Data
Bitcoin drops toward $73,500 as higher-than-expected inflation fuels expectations for December rate hikes.
1Bitcoin Price Decline
Bitcoin dipped toward $73,518 at the Wall Street open on Tuesday, marking its lowest level since August 21. This 11-week low follows a broader market sell-off triggered by fresh macroeconomic data. The cryptocurrency struggled to maintain support levels as traders reacted to the latest Consumer Price Index report released during the session.
2Inflation Data Surprises
The October Consumer Price Index rose 0.4% month-on-month, exceeding the anticipated 0.3% forecast. While this reflects a cooling trend compared to the 0.6% increase recorded in September, the figures remain above target. Shelter costs accounted for over thirty percent of the monthly increase, while food prices rose by 0.5 percent overall.
3Energy Sector Impact
Energy prices played a smaller role in October compared to the previous month, advancing by only 0.7% versus the 5.2% surge seen in September. Despite this moderation, economist Robin Brooks labeled the report as discouraging. He noted that the peak of the year's second major oil price shock likely influenced core inflation.
4Fed Rate Expectations
Federal Reserve governor Christopher Waller previously signaled support for a 25-basis-point interest rate hike in December. Following the CPI release, market sentiment shifted toward a more hawkish stance. Data indicates an 85.3% probability for a 25-basis-point hike, with a 14.7% chance that the Federal Reserve opts for a 50-basis-point increase.
5Broader Market Pressure
US stocks faced immediate downward pressure at the market open alongside Bitcoin. The tech-heavy Nasdaq Composite initially fell 0.6% before attempting a recovery. Investors are currently navigating multiple headwinds, including robust labor market data and the potential for stricter regulatory oversight within the AI sector under the current legislative control.
6Nvidia Board Investigation
Nvidia stock experienced a decline of nearly 4% during the trading session. This drop coincided with news of an internal board investigation regarding CEO Jensen Huang. The inquiry focuses on allegations that the executive may have been targeted by a foreign intelligence effort, adding uncertainty to the high-growth technology sector's performance.
7Equity Market Sentiment
Mosaic Asset Company highlighted extreme sell-side pressure on the Nasdaq, noting that the equity put/call ratio spiked above 1.0. This metric is currently higher than levels observed during the April 2025 trade war selloff. Analysts suggest these indicators could potentially signal that the index has reached a long-term bottom for investors.
8Macroeconomic Outlook
The combination of persistent consumer inflation and a strong labor market has removed concerns regarding an immediate economic slowdown. However, these conditions complicate the Federal Reserve's path toward easing policy. Market participants remain focused on upcoming FOMC meetings as they weigh the impact of sustained high interest rates on asset valuations.