Bitcoin is once again showing signs of life after a period of heavy selling, with traders preparing for what could be a major short squeeze. As the U.S. Consumer Price Index (CPI) report approaches, speculation is building that bullish inflation data could strengthen the case for further Fed rate cuts, a move that often benefits risk assets like Bitcoin.
Key Points
- Bitcoin liquidity charts suggest the next move could be to the upside.
- A rising Coinbase premium points to strong U.S. institutional buying interest.
- Market participants await Friday’s CPI data amid the ongoing government shutdown.
Recent on-chain data indicates a growing concentration of liquidity just above Bitcoin’s current price levels. Historically, markets tend to move toward these high-liquidity zones, suggesting that BTC could be preparing for an upward move.
Some analysts also believe that capital could start rotating out of gold and into Bitcoin after gold’s recent rally. The BTC/Gold ratio appears to be bottoming out, a potential signal that Bitcoin might soon outperform the precious metal.
Crypto analyst Ted Pillows pointed out the increasing Coinbase Bitcoin premium, calling it a bullish indicator.
“Coinbase Bitcoin premium is steadily rising along with BTC price. This is a good sign, and I want to see this continue going into next week. If that happens, $BTC could start a big rally.“
he noted. A higher premium typically reflects stronger U.S. demand compared to global exchanges, often led by institutional investors.
Adding to the excitement, Michael Saylor has hinted that another large Bitcoin purchase could be on the horizon. His company currently holds over 820,000 BTC, worth around $69 billion, with an average buy price near $64,000. A chart tracking his firm’s accumulation history shows that another major acquisition could happen as early as October 20.
Meanwhile, despite the ongoing U.S. government shutdown, the Labor Department confirmed that the September CPI data will still be released this Friday, just days before the Federal Reserve’s October 29 policy meeting. With rate cut expectations already building, markets are pricing in a potential 25 bps reduction, investors are watching closely to see whether the data supports further easing.
A “bullish” CPI reading could provide the momentum Bitcoin needs to extend its recent recovery and push beyond current resistance levels.
Disclaimer: This content does not constitute trading or investment recommendations. It’s essential to conduct your own research before purchasing any cryptocurrency or investing in any services.
