Bitcoin's Recent Surge and Inflation Data
Bitcoin (BTC) recently saw an increase, climbing back to $66,000. This rise was influenced by the U.S. Federal Reserve's preferred inflation measure, the Core PCE Index. This index excludes volatile food and energy prices to provide a clearer picture of inflation. In August, the Core PCE showed a year-on-year increase of 2.6%, which was lower than the expected 2.7%. Such lower-than-expected inflation data often boosts markets because it suggests the Fed might be more likely to cut interest rates, in this case possibly by 50 basis points in November.
U.S. Labor Market's Role in Crypto Trends
Looking forward, the U.S. labor market's health is crucial. The Federal Reserve will consider labor metrics, like the unemployment rate, to decide on future interest rate adjustments. Trading firm QCP Capital highlighted the importance of upcoming labor reports in steering market trends. Key reports include the JOLTs (Job Openings and Labor Turnover Survey) and broader employment data, due on November 1 and 4, respectively. If these metrics show strong improvement, it might increase the chances of a significant rate cut, which could further boost risk assets like Bitcoin and Ethereum.
Potential Market Movements for Bitcoin and Ethereum
A scenario with favorable labor data could push Bitcoin higher, possibly towards $70,000, especially with its recent bullish trend and its recovery above the 200-day moving average. Similarly, Ethereum (ETH) might also benefit. Ethereum has been outperforming Bitcoin since the Fed hinted at potential rate cuts. Market analyst Benjamin Cowen believes Ethereum could reach the $3,000 mark if macroeconomic conditions stay supportive.
Investment Inflows and Market Sentiment
Investor interest in digital assets remains strong, as evidenced by significant inflows into U.S. Bitcoin ETFs, totaling $1.11 billion—the largest weekly inflow since July. Ethereum ETF inflows were also notable, reaching $84.6 million, the highest since August. Such trends suggest robust investor sentiment, supporting the possibility of Bitcoin reaching $70,000 and Ethereum hitting $3,000, given favorable economic updates.
