Bitcoin fell toward an 11-week low of $73,518 on Tuesday as higher-than-expected US inflation data increased concerns about another Federal Reserve interest rate hike in December.
Data from TradingView showed BTC briefly dropping to $73,518, its lowest level since August 21, before recovering above $74,000. The decline followed the release of October’s Consumer Price Index (CPI), which rose 0.4% month-on-month, exceeding economists’ expectations of 0.3%.
Although monthly inflation slowed from September’s 0.6% increase, rising shelter and food costs continued to put pressure on consumers. Shelter prices increased 0.3%, accounting for more than 30% of the monthly CPI rise, while food prices climbed 0.5%. Energy inflation slowed to 0.7% from 5.2% in September.
Economist Robin Brooks described the inflation report as “discouraging,” noting that higher oil prices had contributed to inflationary pressure. Meanwhile, Federal Reserve Governor Christopher Waller supported a potential 25-basis-point interest rate hike in December.
Following the CPI release, market expectations shifted towards tighter monetary policy. CME Group’s FedWatch data showed an 85.3% probability of a 25-basis-point rate hike and a 14.7% chance of a 50-basis-point increase at the December meeting.
US stocks also faced pressure at the Wall Street open. The Nasdaq Composite initially fell 0.6% before recovering its losses, while Nvidia shares dropped nearly 4%.
Market analysts at Mosaic Asset Company highlighted extreme selling pressure in the Nasdaq, pointing to a rising equity put/call ratio. However, the firm suggested that the intense selling activity could indicate the formation of a long-term market bottom.
