Bitcoin held steady around $19,100, moving higher after two consecutive daily losses as stock traders bid up traditional markets ahead of Thursday’s expected release of key inflation data in the Consumer Price Index (CPI) report.
Investors remained in a wait-and-see mode following Wednesday's higher-than-expected U.S. producer price index (PPI) data, a measure of the price of goods sold by manufacturers. Despite the U.S. Federal Reserve's fight against inflation, wholesale prices rose 0.4% for September, compared with the Dow Jones estimate for a 0.2% increase.
Global macro sentiment has driven correlations across assets “back to extremes,” according to QCP Capital’s note. BTC’s correlation with equities and gold is “at all-time highs.” By contrast, the U.S. dollar’s correlation with bitcoin – historically an inverse relationship – is “at all-time lows.”
Stefan Rust, founder of economic data aggregator Truflation, said the markets would probably revert to a downward trend as the Federal Reserve continues its strategy of tightening monetary policy.
“In the past two years, crypto has been highly correlated to stocks and dependent on global fiat liquidity, so we can expect further drops or at least increased daily volatility around the release of the CPI figures tomorrow,” he told CoinDesk via an email.
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