3 US Events to Watch as Inflation and AI Earnings Test Bitcoin

Bitcoin (BTC) faces three US events this week that could decide whether its slide deepens. Consumer inflation data lands Tuesday, AI chip earnings Thursday, and producer prices Friday.

The largest cryptocurrency traded at $74,322, down 1.85% over 24 hours, per BeInCrypto Markets. Hotter inflation could firm bets on a December Fed rate hike, a risk that has weighed on Bitcoin price before.

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Will the October US CPI Report Lock In a December Rate Hike?

The Bureau of Labor Statistics (BLS) publishes October Consumer Price Index (CPI) data on Tuesday at 8:30 a.m. ET.

Economists expect annual inflation to climb to 3.9% from 3.7% in September, the Associated Press (AP) reported. Inflation has run above 3% every month since March, AP noted. 

The release lands with the Federal Reserve (Fed) already tightening. It raised rates in September for the first time in three years. It then held its range at 3.75% to 4.00% on October 28.

Friday’s strong jobs report pushed December hike odds higher. CME FedWatch now shows an 80.5% chance of a quarter-point hike on December 9, up from 70.7% a week earlier.

A US CPI reading at or above 3.9% would give the Fed little reason to step back. Rate bets explain only part of the pressure on Bitcoin, though. Tech stocks have dragged it lower too, and AI earnings arrive later in the week.

Can Cisco and Applied Materials Earnings Calm AI Spending Fears?

The Nasdaq Composite slid into correction territory on November 5, falling 5.52% as chip stocks led the selloff.

AI cloud provider CoreWeave reports first, after Tuesday’s close. Options traders priced a 20.7% earnings swing in its shares ahead of the release.

Cisco earnings for its fiscal first quarter follow after the closing bell on November 12, the company said. Cisco guided in August for quarterly revenue of $18 billion to $18.2 billion, according to its filing.

Applied Materials earnings come the same afternoon, with a conference call at 4:30 p.m. ET, per its announcement. The chip equipment maker guided for fourth-quarter revenue of $10.25 billion, plus or minus $500 million.

In August, Applied Materials CEO Gary Dickerson credited fast global AI adoption for the demand behind a record quarter. Weak outlooks from either company could revive the AI spending worries behind last week’s selloff.

Inflation returns to focus on Friday, when wholesale prices give a second read on cost pressure.

Could Producer Prices Confirm What CPI Shows?

The BLS releases the October Producer Price Index (PPI) on Friday, November 13, at 8:30 a.m. ET.

PPI tracks what producers charge for goods and services. Higher production costs can eventually pass through to consumer prices.

Economists expect October’s PPI reading to be little changed from September, AP said. September’s PPI posted its largest monthly increase since March 2022, with wholesale gasoline up 20.3%.

The past two rounds of these reports offer a guide to how Bitcoin could respond this week.

Can Bitcoin Absorb Another Hot Print From a Weaker Starting Point?

Bitcoin fell after hot CPI and PPI releases in both September and October.

October brought the sharpest drop, as annual inflation rose to a higher-than-expected 3.7%. BTC slid toward $80,000, losing 3.3% in 24 hours. It slipped below that level the next day as hot PPI data added to the selling.

This week, BTC starts from a weaker base. US spot Bitcoin ETFs posted about $1.28 billion in net outflows last week. A wave of forced selling then cleared $855.69 million in positions on Sunday.

BTC also trades below $75,700, the average price recent buyers paid, per Glassnode. Reclaiming that level would ease the pressure, while $70,000 marks the next key downside level.

A softer print could change that read. A cooler July report lifted Bitcoin about 3%, to near $64,500.

The Fed meets December 8 to 9 and will publish fresh rate projections. This week’s reports feed into that decision and into whether the Bitcoin price holds above $70,000. 

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