Brief summary
The U.S. Bureau of Labor Statistics (BLS) released the CPI for November: annual inflation at 3.1% and core inflation at 3% — the first level since September that is said to be affected by the government shutdown lasting 43 days (Oct 1–Nov 12). This data comes as the market is still pricing in a possibility of a Fed rate cut in January at around 20%. As a result: Bitcoin spot ETFs recorded significant inflow before the release, but persistently high CPI limited the rally of risk assets like BTC.
Impact of the shutdown and data quality
- The shutdown caused a data gap as the October report was canceled; the BLS only collected data for the second half of November after the office reopened, making some month-to-month comparisons less reliable.
- Around 670,000 federal employees furloughed and ~730,000 working without pay; the impact is reflected in the loss of 105,000 jobs in October and weak payroll of +64,000 in November, pushing the unemployment rate to 4.6% — the highest since 2021.
- Economists warn that CPI is 'not straightforward', causing investors to be more cautious entering the crypto market.
Rates, Fed, and implications for risk assets
- The increase in import tariffs also contributes to core inflation, especially on goods like furniture, automotive parts, electronics, and apparel.
- Although the Fed cut by 25 bps on December 10, policy projections remain cautious, and the market sees hawkish signals from official comments. As a result, the 10-year Treasury yield strengthened above 4.15%, becoming an alternative that pressures flows into risk assets, including Bitcoin.
Crypto volatility & BTC position
- Ahead of the CPI release, the crypto market is gripped by high volatility; approximately $400 million in liquidations were recorded on December 17.
- BTC was volatile but held around $87K post-CPI — a major rally unconfirmed due to hawkish Fed signals. The shutdown also dampened BTC growth momentum for the October–November period.
Bitcoin ETF: strong inflow before CPI, then slowed
- On December 17, the spot ETF recorded a net inflow of approximately $457 million (before the CPI release), driven by large purchases from several major asset managers. After the CPI remained high, inflows slowed, and a few days prior, there was an outflow during the price correction. November itself closed with a thin inflow of ~$70 million after a period of massive outflows.
Brief outlook for traders
- If CPI remains 'hot' and the Fed delays cuts, downward pressure could see BTC in the $80K–$85K zone. However, factors like rising unemployment and potential year-end discounts could still drive a Santa Claus rally towards ~$100K.
- Technical monitoring and capital flows: watch for net inflow ETF (signals >$300M strong), RSI/MACD indicators, BTC dominance, and conservative stop-loss levels around $80K.
- Upcoming macro data developments (including BOJ CPI) also have the potential to trigger significant volatility.
Conclusion
The crypto market shows resilience but remains vulnerable to macroeconomic shocks and sentiment changes due to inflation data and monetary policy. Monitor ETF flows and labor data to gauge potential short-term direction.
Disclaimer: This information is a summary of news and market analysis, not an investment recommendation.
