CPI data is coming today with expectations at 3.6%.
A hot print would raise odds for more rate-hikes while a cool report would boost the chances for the Fed to pause at least through the end of October. Either way, markets might see increased volatility in the second half of the month, which could impact crypto’s November narrative.
Technically, November has been one of the strongest months for Bitcoin, averaging more than 40% ROI during its peak performance. Smart money seems to be betting on another green November as an analyst picked up on five wallets buying 1,076 BTC worth $90.42 million ahead of CPI’s release.
On the capital rotation front, Bitcoin [BTC] dominance has broken back above the 60% resistance level, suggesting that buying pressure could be building ahead of a volatility spike. This could see the smart money absorb some selling pressure and help keep BTC above the $75k-$80k level, where short-term holders have a significant cost basis and could be the first to sell if the volatility spikes.
If this theory is correct, liquidity will be one of the critical factors influencing Bitcoin in November. According to Alphractal data, global liquidity has increased significantly in the last 30 days. China accounts for 39% of the global money supply, while the US holds 17%, bringing the total global money supply to $140 trillion.
The key takeaway? The timing couldn’t be better. After the CPI-driven rout, there may be some profit-taking pressure, but if more liquidity goes into Bitcoin and the smart money continues to accumulate, a powerful scarcity-driven bullish trend is likely to unfold. One key metric seems to be reflecting this setup already.
Bitcoin faces November rally as USDT faces rejection
A key metric shows that traders might be moving funds out of stablecoins.
Why does this matter? Well, technically, USDT dominance is up more than 2.5% this month, reflecting Bitcoin’s retreat from $87k to $82k. This suggests that traders have been accumulating dry powder, while keeping liquidity on the sidelines. However, this trend may be due to hit a critical inflection point.
As the chart below illustrates, USDT.D is encountering resistance around 7%, which is the same level it failed to break during the mid-September rally. This rejection triggered three weeks of downside in the USDT.D, while Bitcoin rallied from $74k to $87k over the same period. Should the pattern repeat itself, this could trigger another rotation into risk assets, providing Bitcoin with an opportunity to recover.
Now, this is where the global liquidity expansion comes into play.
If the USDT dominance is rejected, while liquidity continues to rise, and smart money keeps accumulating BTC, it could set the stage for the next fresh rally. With the November window approaching, this could give Bitcoin the momentum it needs to retest the $87k level and establish a new bullish trend.
Final Summary
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USDT dominance faces 7% resistance, and a rejection could boost Bitcoin.
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Rising liquidity and BTC accumulation could fuel a November rally toward $87k.