On December 18, Bitcoin maintained a wide-ranging consolidation pattern ahead of key inflation data, fluctuating repeatedly between $86,000 and $90,000. Moneta Markets FX noted that this back-and-forth movement reflects investor caution amid macroeconomic uncertainty, with short-term trading sentiment heating up while medium-term direction remains unclear.
Inflation data has emerged as the market's key variable. Consensus forecasts peg November's inflation rate at 3.1%, with core inflation holding steady at the same level. Moneta Markets FX observed that while this marks a decline from previous highs, it remains well above long-term targets, suggesting interest rates are unlikely to shift toward significant easing soon—a constraint for risk assets including forex and cryptocurrencies.
Bitcoin's reaction to macroeconomic data has shown signs of weakening recently. Earlier weak employment figures failed to sustain upward momentum, indicating market focus has shifted to long-term interest rates and funding costs. Meanwhile, persistently high 10-year Treasury yields continue enhancing fixed-income assets' relative appeal, diverting some risk capital from other markets.
Sector-specific pressures also weigh on crypto markets. Index providers' scrutiny of digital asset firms may trigger passive fund rebalancing, increasing short-term selling pressure. Moneta Markets FX suggests Bitcoin becomes particularly prone to high volatility with weak trends when macroeconomic rate expectations coincide with industry-specific uncertainties.
Looking ahead, Bitcoin will likely remain range-bound until inflation data is fully digested by markets. Moneta Markets FX indicates that further inflation cooling could gradually restore risk appetite, while hotter-than-expected figures might trigger rate expectation repricing, creating periodic pressure on Bitcoin and other risk assets.
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