Bitcoin declined to $80.3K this week after inflation data accelerated to 3.7% year-on-year in September, surpassing market expectations of 3.6%. The stronger-than-expected reading intensified concerns about potential interest rate increases, with the CME FedWatch Tool's probability of a 25 basis point rate hike at the October 28 FOMC meeting rising from 17.7% to 27.7%.
Negative funding rates on Binance fell to -0.0073%, indicating that the majority of market participants held bearish positions. This reading last occurred in June when Bitcoin traded around $62K. Rising odds of additional rate hikes, combined with inflationary pressures, contributed to the downward pressure on Bitcoin prices.
Despite the price decline, open interest data revealed conflicting signals. Twenty-four-hour growth in open interest, measured in BTC, increased from -3.0% to 4.6%, and funding rates remained slightly positive across exchanges during the price drop. This suggested that some market participants were willing to use leverage during the correction, raising the risk profile for long positions should prices continue falling.
The Delta Growth Rate metric, which measures combined market cap and realized cap growth, remained negative throughout the year but has shown signs of improvement in recent weeks. While the negative reading indicates potential undervaluation and weaker speculative activity, the recent upward movement pointed to improving market dynamics, though not enough to signal a structural trend reversal.
Market participants remain divided on whether Bitcoin's correction toward $80K has concluded and whether buying pressure will emerge to sustain momentum.
