Hassan Maishera
TL;DR
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BTC is down by less than 1% and is still trading above $86k.
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The leading cryptocurrency is underperforming ahead of key inflation data in the United States.
Bitcoin Trades Above $86k As Traders Focus on CPI
The cryptocurrency market has continued its choppy price action this week, with Bitcoin and other leading assets currently underperforming. Bitcoin, the leading cryptocurrency by market cap, has lost less than 1% of its value in the last 24 hours and is now trading above $86k per coin.
The bearish performance comes ahead of the release of the CPI data in the United States later today. U.S. inflation data for November, expected to show a 3.1% increase in CPI, could influence Federal Reserve interest rate decisions.
The November CPI data will give investors a fresh look at price pressure in the United States after the government shutdown canceled the October data and left the Federal Reserve in the dark.
Analysts also expect Core inflation, which excludes volatile food and energy prices, to hit 3.1%.
Despite the current market conditions, some analysts are optimistic that Bitcoin could experience a sharp recovery in the near term. In an email to Cryptowisser, Nick Forster, Founder at the onchain options platform, Derive.xyz, stated that,
"Despite the recent drawdown, ETH call positioning is relatively flat across the $3K, $4K, and even $5K strikes, although some of this upside exposure may reflect legacy bullish positioning. On the downside, there is a sizable concentration of puts at the $2.5K strike for the December 26 expiry, highlighting a key level traders are hedging against.”
The analyst added that the markets are pricing a 45% chance that ETH reclaims $3K by the end of Q1 next year, and a 25% chance it surpasses $4K over the same period.
For BTC, the probability of reaching $100K sits near 30%, while the chance of reclaiming all-time highs remains around 10%.
“Overall, volatility remains elevated, and positioning is defensive, but upside tails have not been fully abandoned as markets brace for a volatile start to the year,” Forster concluded.
With Bitcoin’s price action still choppy, altcoins have also been underperforming. The total cryptocurrency market cap has dropped to $2.92 trillion from the $2.94 trillion recorded on Tuesday.
