Stocks and cryptocurrencies prepare for Thursday’s CPI release

  /  4 minutes read
  • On November 8, when the BTC price briefly fell to its lowest level in two years, $200 million worth of long positions were liquidated.
  • The market initially rose in response to the Binance and FTX news, but the day quickly declined as several unconfirmed sources speculated that FTX’s losses might indicate a $6 billion deficit.
  • The Dow Jones increased 0.48% on the back of investors’ optimism regarding the November 8 United States midterm elections, while the tech-heavy Nasdaq fell by only 0.32%.
  • FTX Token and Solana’s SOL had a rough weekend of trading, with altcoins losing double digits in the 15%-30% range, but the tide turned when it was revealed that Binance was in the process of acquiring FTX.
  • Midterm elections and the Consumer Price Index (CPI) print for October later in the week are both expected to be volatile.

BTC/USD experienced a sudden decline that set a low of $17,120 on Bitstamp, losing $2,000 in less than two hours. When it was revealed that the troubled FTX might be acquired by rival Binance, the market initially recovered by over $20,000, but panic returned after the Wall Street opening. Bitcoin was able to surpass the previous macro lows of $17,600 set in June this year because the pair last traded there in late November 2020.

Trading view
Source: Tradingview

We are going through an unclear event risk that is mostly in the US but will eventually affect the whole world. The US midterm elections have gotten a lot of attention in the political world, but they haven’t always had much of an effect on how people feel around the world.
When it comes to the US consumer inflation report or US CPI, we think the market will be putting a lot of weight on the risk that the event will happen when it is supposed to. In the meantime, it may be hard for serious trends to form because the US central bank’s generosity, which is one of the most important parts of the financial system, is still up in the air. Until the US central bank commits to a change in operations, the focus is on market measures that could reasonably reduce speculative volatility

Source: Coinglass

Numbers from a resource for on-chain monitoring Coinglass, on the other hand, kept track of how bad it was for long investors who sold at the wrong time. On November 8, exchanges liquidated long positions in BTC to the tune of $214 million. Cross-crypto long positions were liquidated to the tune of $670 million. When shorts are added in, the day’s total liquidations came to $915 million.

Even though the number of people investing in crypto grew a lot in 2021, retail traders who want to make money on those changes have a big effect on prices. Since June, Bitcoin has been flat, mostly staying between $18,000 and $21,000 after falling from its all-time high near $68,000 in November 2021. Going below the all-time low may not immediately get the attention of investors.

Concluding Thoughts:

The short-term uncertainty of cryptocurrencies doesn’t seem to have changed the long-term outlook of institutional investors. CEO of BNY Mellon Robin Vince said that a poll commissioned by the bank found that 91% of institutional investors were interested in investing in tokenized assets in the coming years. About 40% of them already own cryptocurrency, and about 75% are actively investing in digital assets or are thinking about doing so. Concerns about FTX’s possible bankruptcy are a big reason why Bitcoin’s price has hit a new yearly low. People in the market still think that Bitcoin’s price will go up in the long run, especially since it seems like more banks and financial institutions are using digital cash to settle transactions

Leave a Reply

Your email address will not be published. Required fields are marked *