Bitcoin Plunges Below $82,000 Amid Inflation Fears and Rising ETF Inflows

Bitcoin Plunges Below $82,000 Amid Inflation Fears and Rising ETF Inflows

Bitcoin fell to $82,000 Wednesday as hotter-than-expected U.S. inflation data fueled concerns over additional Federal Reserve rate hikes. U.S. headline CPI accelerated to 3.7% year-over-year, exceeding the 3.6% consensus estimate and rising from the previous 3.4% reading.

Institutional Demand Shows Signs of Recovery

Despite the selloff, institutional demand showed signs of recovery. SoSoValue data showed U.S. spot Bitcoin ETFs recorded $175.6 million in daily net inflows, following three sessions of outflows and one session of marginal inflows.

Long-Term Holder Activity Increases

Long-term holder activity also increased, with both cohorts moving more frequently in late September. Similar spikes emerged during Bitcoin's January-February drop from $90,000 to $65,000 and again in late July-August.

Analysts Weigh In

Macro analyst Benjamin Cowen warned that persistent inflation, elevated Treasury yields and rising oil prices could pressure Bitcoin and other risk assets ahead of the November midterm elections.

Technical Analysis

Crypto trader Lucky Luciano highlighted Bitcoin's declining volatility as a potential signal of an approaching major price move. He noted that previous periods of subdued volatility preceded significant rallies, including Bitcoin's advance from around $27,000 in 2023 to above $73,000 in early 2024.