Bitcoin weathered volatility in risk assets this week, but can we say it has broken free from macroeconomic forces? I think it’s too soon. BlockBeats reported on October 23, Beijing time, that CoinShares said Bitcoin held up relatively well this week amid renewed volatility in risk-asset markets, thanks mainly to a recovery in spot buying, stronger equity-market performance, and some short covering. This is the report’s explanation of market performance, not a transaction-by-transaction record of fund flows, and it does not prove that any one factor alone drove prices higher.
Interest-rate expectations are more worth watching. The report said markets broadly expect the Federal Reserve to leave rates unchanged on October 28, but expectations of another rate hike in December remain elevated, with the probability close to 83%. Weakness in the housing market could leave room to pause rate hikes; however, last week’s higher-than-expected CPI and PPI data suggest inflationary pressure has not disappeared. With both signals in play, a recovery in spot buying alone is not enough to conclude that liquidity will ease.
The report discusses $BTC , and its resilience should not be directly extrapolated to $ETH . To judge whether this support can continue, we also need to see whether spot demand persists, how interest-rate expectations evolve, and whether Bitcoin can continue to hold up amid future market volatility. The report did not provide direct fund-flow data sufficient to confirm the magnitude of these factors’ effects; the simultaneous appearance of prices and news does not, by itself, establish causation.
Interest-rate expectations are more worth watching. The report said markets broadly expect the Federal Reserve to leave rates unchanged on October 28, but expectations of another rate hike in December remain elevated, with the probability close to 83%. Weakness in the housing market could leave room to pause rate hikes; however, last week’s higher-than-expected CPI and PPI data suggest inflationary pressure has not disappeared. With both signals in play, a recovery in spot buying alone is not enough to conclude that liquidity will ease.
The report discusses $BTC , and its resilience should not be directly extrapolated to $ETH . To judge whether this support can continue, we also need to see whether spot demand persists, how interest-rate expectations evolve, and whether Bitcoin can continue to hold up amid future market volatility. The report did not provide direct fund-flow data sufficient to confirm the magnitude of these factors’ effects; the simultaneous appearance of prices and news does not, by itself, establish causation.
