Highlights for Funded Traders
- Bitcoin’s decline puts the historically winning month in jeopardy.
- Heads turn to today’s US inflation data for interest rate signals
Bitcoin wiped out its monthly gains Wednesday, leading some investors to believe the “Uptober” bout will break.
The crypto coin excited traders at the beginning of the month opening at $27,019, before hitting a high of $28,550 on the 2nd. The decentralized currency has now retreated to around $26,700, tumbling to the lowest point of October so far.
The loss of momentum may be due to a shift in market sentiment. The ongoing tensions in the Middle East are pushing traders toward safe-haven investments such as oil or gold.
The last time October closed in negative territory was back in 2018, but it has been a notably prosperous month in the four years following, coining the nickname “Uptober”.
Comments from Federal Reserve officials – along with the newly-released September meeting minutes – regarding interest rates, may have reassured investors, leading them to continue diversifying their portfolio among traditional assets.
The Fiscal Forecast
On that note, today’s US CPI report will provide more insight into how consumer prices have changed since August. Analysts are forecasting a 0.3% monthly increase, bringing it down from the prior month’s 0.6% rise. Core CPI, which excludes food and energy, is expected to remain unchanged at 0.3%. Year-over-year, inflation is expected to land at a 3.6% advance for September.
Expanding on that point, inflation has been a key focus for the Fed, having recently paused their key interest rate at 5.25%-5.50% in a hawkish strategy to meet their 2% goal. September’s meeting minutes printed yesterday revealed that the US central bank doesn’t intend to raise their rates any time soon. Instead, Fed officials are watching the situation carefully, stating that they are “prepared to adjust the stance of monetary policy as appropriate”.
To put it simply, traders need to keep a watchful eye on market conditions. News, like the CPI data, could stir up some drama. Make use of risk management tools such as stop loss to safeguard your trades against volatility. Investments in crypto as a highly volatile asset class should be closely monitored. Will this zig-zagging Uptober lead you to HODL or sell?