For the first time since mid-September, Bitcoin has once again dipped below the psychologically important $80,000 mark. A cocktail of interest rate concerns, AI doubts, and a declining appetite for risk among investors is putting the recently emerging optimism to the test. The hope for regulatory progress in the United States has at least for now given way to a sober assessment.
Once again, the question arises as to what role Bitcoin should play in an increasingly AI-driven, technology-driven, and macro-economic driven market environment.
Bitcoin chart on monthly basis
Producer prices stronger than expected – retail sales cannot meet expectations
This afternoon, investors once again had to process important economic data from the US. In particular, the US price data may have temporarily tightened the downward pressure. US producer prices rose significantly by 1.3 percent compared with the previous month, much stronger than economists expected in advance (0.5 percent), following 0.5 percent in the comparison period.
Retail sales rose by 0.8 percent compared to August, almost three times as strong as expected (0.3 percent).
„Fed Watch Tool again forecasts increased chance of a pause in interest rates at the October meeting
According to the CME Group’s „Fed Watch Tool,“ however, one day after the release of the latest U.S. job data, 70.7 percent of market participants again expect a pause in interest rates and 29.3 percent an interest rate hike, totaling a quarter of a percentage point at the October meeting in approximately two weeks (October 28).
US inflation was 3.7 percent higher on Wednesday than expected (3.6 percent, after 3.4 percent in August (compared to the same month last year)). The prospect of further rising interest rates in the US increases the opportunity cost of holding interest-free assets like Bitcoin.
