Analysts Call CPI And Trade War Can Change Crypto Market Direction

Bitcoin illustration (photo: Freepic)

JAKARTA - The price of Bitcoin (BTC) has strengthened again after previously dropping to around US$106,000 (Rp1.76 billion). The strengthening occurred after the sell-off by investors subsided and the trend in the ETF spot increased.

Tokocrypto analyst Fyqieh Almuttaqin said that the price movement of Bitcoin this time was still heavily influenced by the dynamics of short-term liquidity and market expectations of US monetary policy.

"The flow into the ETF does trigger a technical rebound, but macroeconomic pressure still limits the potential for a more aggressive increase," Fyqieh said in his explanation.

Analysts expect this week to be an important period for the risk asset market, with September's CPI data being a key indicator that could affect the Fed's interest rate policy direction.

According to Fyqieh, weaker CPIs approaching 0.2% will strengthen the prospects for lower interest rates and improve sentiment towards crypto assets, including Bitcoin.

However, a number of analysts warned that the cuts could trigger sell the news, as happened in September's first cut, when the market lost its cap to 60 billion US dollars shortly after the announcement.

In addition to monetary factors, Fyqieh also said that trade tensions between the US and China are also important variables in the dynamics of the crypto market.

US President Donald Trump is scheduled to meet Chinese President Xi Jinping at the APEC summit on October 31 to discuss a potential trade deal before a new rate of 100% takes effect on November 1.

According to him, the combination of geopolitical tensions and expectations of lower interest rates creates a 'controlled uncertainty' phase for Bitcoin.

The market is currently considering two opposite things: pressure from the macro side such as trade war and inflation, as well as hopes of cutting interest rates that can boost liquidity. In this situation, retail investors should wait for confirmation of new trends after the release of CPI," he said.