Crypto Markets Rally Ahead of U.S. Inflation Report

The cryptocurrency market started the week in the green, with most major coins rallying on Monday.

Bitcoin (BTC) rose 1.7% to $63,800, while Ethereum (ETH) climbed 1.5% to $2,500. (SOL) jumped 3%, and Polkadot (DOT) gained 1%.

The bullish price action comes ahead of a busy week packed with significant U.S. economic data releases, including Federal Reserve meeting minutes and the Consumer Price Index (CPI).

U.S. Treasury yields climbed, with the 10-year benchmark yield topping 4% for the first time since August. This uptick in yields is influencing global markets, including cryptocurrencies.

In the past 24 hours, around 56,480 traders were liquidated for approximately $164 million, per CoinGlass. Notably, 60% of these liquidations were short positions, indicating that many traders were caught off-guard by the market's upward movement.

Among the top 100 digital assets, Layer 1 blockchain Sui is today’s top gainer, with a 20% surge. Memecoins also took the spotlight as Mog Coin (MOG) surged by 18%. Other notable memecoin gainers included Dogwifhat (WIF) and Popcat (POPCAT), rising by 13%. Meanwhile, some of the market’s well-known players, like Monero (XMR), Maker (MKR), and Kaspa (KAS), were among the worst performers, with declines ranging from 2% to 5%.

According to QCP Capital, a digital asset trading firm, “Uptober” seems to be back on track.

“BTC is at similar levels to where it started last Monday. The Uptober narrative coupled with strong NFP numbers has helped BTC find strong support around 60k,” the firm said.

Bitcoin Gains 2.5% in Q3

Bitcoin gained only 2.5% in the third quarter of 2024. Bitcoin has mostly been range-bound since its peak in March, fluctuating between $70,000 and $54,000.

Bitcoin is still the top-performing asset this year despite a "seasonally weak" third quarter, according to the New York Digital Investment Group (NYDIG).

According to Greg Cipolaro, global head of research at NYDIG, this pattern suggests that while the cryptocurrency has experienced periods of growth, it has struggled to break out in either direction over the past six months.

Several factors influenced Bitcoin's market behavior during the quarter, notably the near-conclusion of several bankruptcy cases, including the long-standing Mt. Gox saga, which resulted in billions in BTC being returned to creditors.

Market Outflows

Global crypto investment products recorded net outflows of $147 million last week, snapping an almost $2 billion three-week inflow streak, according to CoinShares.

The dip in market sentiment is attributed to better-than-expected economic data that dampened the prospects for significant rate cuts. Bitcoin-based funds led with $159 million in net outflows, while short-BTC products attracted $2.8 million in inflows.

In terms of geographical impact, U.S.-based funds experienced the most significant negative flows, losing $209 million, followed by Germany and Hong Kong with $8.3 million and $7.3 million, respectively. Meanwhile, funds in Canada and Switzerland offset some losses, registering net inflows of $43 million and $35 million.

Wall Street Slips

Crypto isn't the only market under pressure.

U.S. stock markets slipped on Monday as Wall Street struggled to maintain momentum after Friday's rally. The S&P 500 fell by 0.35%, the Nasdaq dipped 0.4%, and the Dow Jones Industrial Average shed 0.5%.

Meanwhile, Asian markets surged on Monday, with Hong Kong's Hang Seng index soaring by 3%. The positive momentum follows a series of stimulus measures introduced by the People's Bank of China over the last two weeks, boosting market sentiment across the region. Further economic stimulus is anticipated from China, with a press conference scheduled for Tuesday morning.