Bitcoin fell less than 1% over 24 hours despite a hotter-than-forecast U.S. inflation report and a leverage flush. Spot bitcoin ETF outflows slowed, but stablecoins are tight and the Coinbase Premium has been negative for 30 straight days.
Bitcoin fell less than 1% over the past 24 hours after Tuesday's hot U.S. inflation report and a flush-out of leverage positions. The question now is whether that is a sign of resilience or just a pause in selling.
Rate-hike bets build as liquidations jump
Consumer prices rose 0.4% last month, more than forecast. Traders now price in a 90% chance of a quarter-point Fed interest-rate increase, according to CME FedWatch.
The largest cryptocurrency dropped to around $72,700 on Tuesday and was recently trading around $74,700. Futures traders took the brunt, with liquidations jumping 288% to $725 million, according to CoinGlass.
ETF selling slows while stablecoins tighten
What has changed is the pace of ETF selling. U.S. spot bitcoin ETFs lost $95 million on Tuesday for a fourth straight day of net outflows, down from $201 million on Monday, $412 million on Friday and $430 million on Thursday.
Stablecoins are tight too. According to CryptoQuant, Tether's USDT market capitalization has dropped $6.6 billion over 60 days, the biggest 60-day contraction since its data began in 2022. The Coinbase Premium, a gauge of U.S. demand, has been negative for 30 straight days.
Bitcoin hovers near its 200-day average
Bitcoin is hovering around its 200-day moving average, near $73,200 by CryptoQuant's calculation, which the firm says separates a shallow correction from a deeper one. It is also below the 365-day average of $76,400, which CryptoQuant says must be reclaimed to restore a bullish structure.
Options traders are buying protection, though not frantically. Eight of the 10 most active bitcoin contracts on Deribit expiring through Nov. 27 are puts at strikes of $69,000 to $74,000, yet implied volatility is only around 36% to 38%.
Analysts at BRN said on Tuesday that bitcoin needs "real buying, not a lucky break."
Source: CoinDesk
Trading involves risk.