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Marcus Sotiriou, Analyst At a Listed Digital Asset Broker global block (TSXV:BLOK).
Yesterday, Bitcoin found resistance at the 100-day moving average and pulled back to $20,000. As mentioned as a possibility in yesterday’s commentary, strong economic data combined with sluggish earnings from tech giants such as Amazon led to crypto’s sell-off overnight.
However, Bitcoin is rising today after receiving the expected 1.2% Employment Cost Index (ECI) data. This number continues the downward trend of ECI. But if you compare his ECI charts over the last 12-14 years, it’s almost three times higher than the average of about 0.4. This means the Federal Reserve cannot risk reversing its aggressive policy for now.
Therefore, at the next FOMC meeting on November 2nd, it is unlikely that Federal Reserve Chairman Jerome Powell will be discussing a possible turnaround going forward. That said, given the downward trend over the past few months, we’ve heard talk of a 50 basis point increase instead of 75 basis points.
Nevertheless, the question remains as to where the terminal rate will be when the Federal Funds rate peaks.
Core Scientific, the world’s largest Bitcoin miner, is now bankrupt. This is because Bitcoin trading has been below the cost of production for too long and means that many miners have not been able to sustain themselves. may force miners to move to cheaper renewable energy. They started mining at a 6-megawatt solar facility in western Colorado. We expect more Bitcoin miners to follow this path, especially if stricter regulations are applied regarding the energy consumption of Bitcoin miners.
