Bitcoin Trades Sideways Near $83,500 as Investors Await Key US Inflation Report

Bitcoin traded within a narrow range on Wednesday, holding near the $83,500 level as cryptocurrency investors adopted a cautious stance ahead of a pivotal U.S. inflation report.

As of 2:00 AM ET, the world's largest cryptocurrency was down 0.26% at $83,453.4. The broader digital asset market experienced slightly larger declines, continuing a period of weakness that began in early October amid profit-taking and wider risk-off sentiment.

Market Braces for Inflation Data

Investors are largely on the sidelines pending the release of the U.S. Consumer Price Index (CPI) later on Wednesday. Market consensus anticipates that inflation remained persistent in September, a reading that could strengthen the Federal Reserve's case for further interest rate hikes.

The prospect of higher rates, which has driven a surge in U.S. Treasury yields this month, typically creates headwinds for risk assets like cryptocurrencies. Additional market pressure comes from rising oil prices linked to ongoing military tensions in the Middle East.

ETF Inflows Provide Some Support

Despite the cautious mood, Bitcoin's downside was limited by a rebound in capital flows into spot Bitcoin exchange-traded funds (ETFs). The funds saw a revival of investor interest after a period of significant withdrawals.

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• Data from SoSoValue showed that spot Bitcoin ETFs recorded a net inflow of $175.6 million on Tuesday, the highest level in nearly two weeks.
• This follows a substantial net outflow of $681 million during the prior week.

While inflows were strong during the third quarter, they lost momentum in early October. The sustainability of this recent recovery will likely depend on the forthcoming economic data and its effect on interest rate expectations.

Altcoins Trend Lower

Most other major cryptocurrencies also traded in the red as investors awaited the CPI report. The cautious sentiment was felt across the altcoin market.

• Ethereum (ETH), the second-largest cryptocurrency, fell 1.1% to $2,506.09.
• Other notable tokens including XRP, Solana (SOL), and Cardano (ADA) posted losses ranging from 0.7% to 2.1%.