CryptoSlate
Bitcoin fell below $73,000 on Nov. 10 as the market-implied probability of a half-point Federal Reserve rate hike in December rose to 13.6% from zero. A quarter-point increase remained the dominant outcome at 86.4%, according to a CME FedWatch snapshot cited by Barron's. US spot Bitcoin ETFs shed about $1.5 billion from Nov. 2 to Nov. 9, Farside Investors data showed.
Why it matters
October headline consumer prices rose 0.4% from the prior month, above the 0.3% forecast, while core prices rose 0.3% against a 0.2% forecast. The core reading met a condition Fed Governor Christopher Waller had set for considering a 50-basis-point move, although support from the wider committee is a separate question.
The shift in probabilities raised the expected December increase from 21.0 basis points to 28.4, still well below the 37.5 basis points implied by an even split between quarter-point and half-point hikes. A Reuters poll of 101 economists expected a 25-basis-point increase.
Core PCE data on Nov. 25 and the Dec. 4 jobs report will test the case for faster tightening before the Fed's Dec. 9 decision. November CPI is due a day after that decision.
Market impact
The two-year Treasury yield rose about 19 basis points to 4.74% on Nov. 10, while the dollar index gained 0.6% and gold fell more than 2%. For Bitcoin, the rate outlook and ETF flows matter alongside the size of any December hike.
Glassnode identified a modeled Bitcoin long-liquidation band at $73,000 to $76,000 and another at $60,000 to $63,000. These are estimates of where leveraged positions could be forced to close, not confirmed support levels or price forecasts.
Frequently asked questions
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What was the most likely December Fed move in the snapshot?
A 25-basis-point hike had an 86.4% probability, while a 50-basis-point increase stood at 13.6%, according to the CME FedWatch snapshot.
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How did October inflation compare with forecasts?
Headline CPI rose 0.4% month over month against a 0.3% forecast. Core CPI rose 0.3%, compared with a 0.2% forecast.
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How much money left US spot Bitcoin ETFs?
US spot Bitcoin ETFs recorded about $1.5 billion in net outflows from Nov. 2 to Nov. 9, according to Farside Investors.
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Which economic releases come before the December Fed decision?
Core PCE data is due Nov. 25 and the jobs report on Dec. 4. The Fed decision is scheduled for Dec. 9.
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Do Glassnode's liquidation bands forecast Bitcoin's price?
No. The bands estimate where leveraged positions could be forced to close; they are not confirmed support levels or price forecasts.
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