Recent Bitcoin Buyers Cap Gains as Hot US Inflation Weighs on Gold and Silver

what happened

Glassnode analysts say recent Bitcoin buyers are now the main source of pressure on the price. Investors who bought over the past two years have a cost basis above $88,000, and they have pushed the price back twice this year. Longer-term holders have largely stopped selling at a loss, while those already in profit are selling more than those in the red, as in past recoveries. Until Bitcoin closes above $88,000, the analysts expect each rally to meet sellers who are ready to exit near break-even.

September US consumer price inflation came in above estimates, raising expectations of a Fed rate increase this month and lifting the dollar. Front-month gold settled 1.6% lower in New York at $4,084.80 an ounce. Silver fell 6.1% to $55.55 an ounce, its lowest close in almost 11 months. Attacks in the Persian Gulf are lifting oil prices, which Kotak Neo's Kaynat Chainwala says keeps the risk that energy-led inflation complicates the Fed's path.

CryptoQuant reports that analysts have flipped from bearish to bullish since July, with 89% positive on bitcoin, 88% on ethereum and 91% on solana. Separately, Royal Bank of Canada cardholder data shows Canadians still spending despite high energy prices, though momentum is cooling.

why it matters

Hotter inflation data raises the odds of a Fed rate hike, which typically supports the dollar and puts pressure on precious metals and crypto. The sharp drop in silver, its weakest close in nearly 11 months, shows how sensitive these markets are to shifts in rate expectations.

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