Rising volumes and price gains suggest traders could be buying into several narratives that could drive prices.
- Bitcoin has edged higher above $63,000 as the new week unfolds several narratives that could influence prices. The Federal Reserve minutes, CPI data, and Q3 earnings could drive further price gains.
Bitcoin [BTC] has traded rangebound between $60,000 and $64,500 in the last seven days. The choppy price movements with no clear trend show a state of market uncertainty.
However, BTC could be headed for a volatile week ahead as trading volumes had jumped by 55% at press time per CoinMarketCap. Bitcoin has also gained by 2.5% in 24 hours to trade at $63,435.
The rising volumes and price gains suggest that traders could be buying into several narratives that could drive prices this week.
Federal Reserve minutes
The US Federal Reserve is set to release its minutes for the September monetary policy meeting on 9th October.
Last month, the Federal Reserve trimmed interest rates for the first time since 2020. The September minutes could shed light on possible rate cuts during the November and December meetings.
September’s 50-basis point reduction played a role in driving BTC prices last month. Data from the CME FedWatch Tool shows that 97% of investors anticipate that the Fed will cut rates by 25 basis points in November.
Source: CME FedWatch Tool
A further reduction in interest rates will stir interest in risk assets like Bitcoin. Therefore, if the Fed minutes show a more dovish stance, it could spur BTC gains.
CPI & PPI data
The US inflation data for September is set for release on 10th October. Markets anticipate that the annual inflation rate will come in at 2.3%, a drop from 2.5% reported in August.
Additionally, the Core Inflation Rate year-on-year is expected to cool down to 3.1%, a drop from the 3.2% reported in August.
The Producer Price Index (PPI), which is also used to predict inflation will be released on 11th October. Economists forecast that the year-on-year PPI data will drop from 1.7% to 1.3%.
If the inflation data comes in as expected or falls below expectations, it could drive gains for Bitcoin. On the other hand, if this data comes in hotter than expected, it could lead to Bitcoin’s volatility and cause a drop in prices.
BlackRock’s Q3 earnings
$10 trillion asset manager BlackRock, which is one of the issuers of spot Bitcoin and Ethereum exchange-traded funds (ETFs), will release its quarterly results this week.
BlackRock’s iShares Bitcoin Trust (IBIT) holds 367,000 BTC valued at $22 billion. Therefore, the strength of its Q3 earnings could influence prices.
JPMorgan will also release its Q3 results later this week, after which it will make 13-F filings with the US Securities and Exchange Commission (SEC) revealing its exposure to Bitcoin ETFs.
In Q2, JPMorgan’s 13-F filing revealed it held $760,000 worth of Bitcoin ETF shares. Given that it is the largest US bank, a change in its Bitcoin ETF holdings could drive volatility.
These three narratives are already driving activity in the Bitcoin futures market. BTC’s open interest has increased to the second-highest level this month to $34 million at press time per Coinglass.
This increase shows there are more traders opening positions and participating in the market.
Source: Coinglass
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