Bitcoin Falls To $81K After Hotter-Than-Expected US Inflation Breaks BTC Below Tight Trading Range

• Bitcoin fell to around $81,000 on Wednesday, breaking below its recent trading range after hotter-than-expected U.S. inflation data.
• Bloomberg Intelligence strategist Mike McGlone warned that Bitcoin's 50-week moving average had "rolled over akin to 2022”, despite rising stocks, bond yields, and metals.
• Bloomberg Intelligence ETF analyst Eric Balchunas said Bitcoin's appeal lies in being "somewhat that the government can't debase," while noting that Bitcoin and gold do not always move in line with the news.

Bitcoin (BTC) fell to about $81,700 on Wednesday, breaking out of the tight trading range it had been in for days after hotter-than-expected U.S. inflation data.

The consumer price index (CPI) rose 3.7% in September from a year ago, the Bureau of Labor Statistics said. That was higher than the 3.4% in August and above the 3.6% economists had forecast.

Core inflation, excluding food and energy, also beat expectations at 2.6%, up from the expected 2.5%. Most of the work on the headline number was done by Energy. Gasoline prices climbed 9.1%for the month and accounted for more than half of the overall increase, the BLS said. Shelter prices rose 0.4% month-on-month and 3.2% year-on-year.

McGlone Flags Bitcoin Rollover

Bitcoin’s chart has turned down while other risk assets haven’t, said Mike McGlone, commodity strategist at Bloomberg Intelligence on X. McGlone said that Bitcoin has “rolled over akin to 2022” even as beta, yields and metals keep rising, and asked whether that is “a warning or feint.” 

McGlone attached a chart showing 50-week moving averages for Bitcoin, the S&P 500, the 30-year Treasury yield, and the Bloomberg All Metals Total Return Subindex, which he claimed exhibit the same directional correlation. 

He also stated the connection between copper futures contracts and the S&P 500 over 50 weeks is roughly 0.64, which he said has never been higher on the way up since 1988. 

ETF Flows Ran Opposite

That drop also follows the U.S. spot Bitcoin exchange-traded funds (ETFs). Funds drew $175.62 million on Tuesday, their largest daily net inflow since Oct. 2, according to SoSoValue data. 

Bloomberg Intelligence ETF analyst Eric Balchunas stated that Bitcoin’s main allure is that it is something that the government can’t debase. Speaking with Natalie Brunell, he added that assets like Bitcoin and gold don’t necessarily follow the news. “If Bitcoin can get that near gold, look out.”

Bitcoin’s price was trading around $81,867, down over 2% in the last 24 hours. On Stocktwits, retail sentiment around BTC remained in the ‘bearish’ zone.

Read also: Wall Street Split On Robinhood Ahead Of Earnings – Wells Fargo Cuts HOOD, BLSH Targets

For updates and corrections, email newsroom[at]stocktwits[dot]com.