Can crypto recover if US inflation keeps rate hike bets alive?
The US jobs report strengthened the case for a December rate increase just as investors withdrew $1.28 billion from spot Bitcoin ETFs in a week. Tuesday’s inflation release gives traders a new test, but a gap in last year’s data means much of the report will have to be read month to month.
- US employers added 165,000 jobs in October, giving markets a reason to reassess the path of interest rates before the December Federal Reserve meeting.
- US spot Bitcoin ETFs recorded approximately $1.28 billion in net outflows from 2 to 6 November, despite one positive session.
- Friday’s $411.9 million net withdrawal included a $403 million outflow at BlackRock’s IBIT and a $42.8 million inflow at Fidelity’s FBTC.
- The October CPI release is due on 10 November at 8:30 a.m. US Eastern time, or 7 p.m. in India.
- The Bureau of Labor Statistics will omit 12-month changes where the October 2025 comparison is missing, making monthly readings particularly important.
Bitcoin enters CPI week with two sources of pressure. The October jobs report showed 165,000 new payrolls, while US spot Bitcoin ETF flows turned sharply negative after a brief midweek recovery. Bitcoin fell below $75,000 on 9 November, with Ether trading near $2,100.
The jobs figure gave investors a reason to reassess whether the Federal Reserve might raise rates in December. The fund data show a separate problem. A rebound in Bitcoin would have to hold in a market where regulated funds had recently lost money on four of five trading days.
The distinction was visible before the weekend. Bitcoin reclaimed $76,000 on Friday even after Thursday’s large fund withdrawals. That rebound had to be read against the time of the price quote and the date on the fund data. Tuesday’s CPI release presents a similar timing problem because it arrives before the US equity session.
How the $1.28 billion in withdrawals added up
Farside’s rounded daily figures were negative $398.6 million on Monday, negative $115.6 million on Tuesday, positive $74.6 million on Wednesday, negative $430.2 million on Thursday and negative $411.9 million on Friday. They sum to negative $1,281.7 million. The positive day reduced the week’s withdrawals without reversing their direction.
Friday also illustrates why a daily total needs a fund-by-fund breakdown. BlackRock’s IBIT lost $403 million while Fidelity’s FBTC added $42.8 million. Subtract IBIT’s signed entry from the group total and the rest of the funds collectively recorded an $8.9 million withdrawal. That arithmetic describes the distribution of net flows. It cannot identify whether any of the money withdrawn from one fund went into another.
The week provides a stronger signal than any one trading day. Thursday’s withdrawals were spread across several funds, while Friday’s total was dominated by IBIT. A reader following the rebound should ask whether creations pick up across several products, whether a single large fund moves the total, or whether withdrawals simply become smaller.
The missing comparison in Tuesday’s CPI
The BLS release calendar schedules October CPI for 10 November at 8:30 a.m. Eastern time. A year-on-year comparison normally divides this October’s price index by the index from the same month last year. The 2025 funding lapse left most October 2025 CPI indexes unavailable.
The BLS explanation of the gap says it will omit October 2026 annual changes for series where the earlier observation is missing. A blank annual figure would therefore say something about the comparison period, rather than the direction of current prices.
The monthly figures still offer an observation to compare with expectations. Traders can look at the seasonally adjusted monthly change and separate categories such as shelter, goods and services where those readings are available. They should keep a monthly movement and an annualised calculation separate from an official 12-month rate. Annualising a single month assumes that pace repeats and can exaggerate a temporary move.
Why the flow numbers need a clock
Bitcoin kept trading after Friday’s ETF session ended. By Saturday it had moved back above $76,000, even though the latest flow figures still showed Friday’s withdrawals. There was no Saturday US fund session to confirm whether the people buying Bitcoin over the weekend were also entering the ETFs.
That distinction also applies across assets. As crypto.news reported, Bitcoin and Ether ETFs lost a combined $1.65 billion over the week. The combined number describes the breadth of fund withdrawals. The Bitcoin total is the appropriate comparison when assessing the size of the withdrawals against a Bitcoin price move.
What would make a rebound hold?
A softer monthly reading could reduce the pressure for a rate increase. The immediate test would be how yields and rate expectations move after release. If Bitcoin rises while Treasury yields fall, the timing would be consistent with a rates-driven response, although it would not establish that interest rates caused every trade.
The crypto data can then distinguish different types of rebound. Rising prices with falling futures open interest can be consistent with traders closing short positions. Rising prices with stronger spot demand and improving ETF creations would give a different account. Open interest alone cannot show which side closed, and ETF totals are reported for a US trading session rather than minute by minute.
A stronger monthly print would test whether the recent lows can attract buyers while rate expectations remain restrictive. The useful comparison is between the first reaction and what remains by the US close. A price spike that disappears as yields rise again gives less evidence of a durable recovery than a move that attracts buyers over several sessions.
Two Fed officials had already voted for an increase
The Federal Reserve held its target range at 3.75% to 4% on 28 October. Federal Reserve Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for a quarter-point increase, leaving the decision at 10 to 2.
The committee described economic activity as strong and inflation as elevated. It also pointed to resilient domestic spending and robust capital investment, even as geopolitical developments contributed to uncertainty.
The payroll figures came after that meeting. A gain of 165,000 jobs gives officials a fresh measure of hiring as they weigh whether existing rates are doing enough to slow inflation. It also gives investors a reason to look beyond the widely watched inflation number when assessing the December decision.
Employment and prices answer different questions. Employers can continue adding jobs even while consumers pull back in some categories. The first payroll estimate can also be revised as more employers respond. A reading that moves traders on publication day may carry a different weight by the next meeting.
The split in October establishes that the case for raising rates had support inside the committee before the latest hiring figures. The next CPI report can affect how investors assess that support. It cannot establish how the ten officials who favoured holding in October will vote in December.
A rise in short-term yields after CPI would give one measure of how bond investors interpreted the release. The change in the rates implied by futures contracts would give another. Both measure what the market is pricing at the time, while the policy decision still depends on information available to officials when they meet.
September gives the October report a point of comparison
The September CPI release put the seasonally adjusted monthly rise at 0.6% for all items and 0.3% excluding food and energy. The published annual increases were 3.7% and 2.6%, respectively.
The two September annual figures compare prices with September 2025. The figures missing in October would have compared a different month with its own prior-year reference. Using the September rates again would quietly shift the period under discussion while making it look as if the annual measure had been updated.
October still has a previous-month reference for the monthly change. The headline and core rates can therefore be compared with September’s results and with what investors expected before release. Those comparisons will show whether prices rose faster or slower than in September and whether the result surprised the market.
A slowdown from September can still produce a rise in yields if investors had priced in a larger improvement. Conversely, a firm reading can be accompanied by falling yields if traders had prepared for something stronger. The price reaction depends on the distance between the result and expectations as well as on the number itself.
Looking across several consecutive monthly readings can help identify whether one release departs from the recent trend. The appropriate calculation compounds the changes over the interval in question. Annualising that result describes the pace that would follow if the same rate continued. It remains a calculation based on a shorter period rather than the missing official annual rate.
The components can also tell different stories. A fall in gasoline prices can slow headline inflation without directly lowering the core measure. A change in several services categories may have more bearing on the persistence of inflation than a large move in one volatile component.
Shelter is worth reading separately because its measurement is distinct from the asking rents advertised for new leases. CPI includes rent and owners’ equivalent rent, which can respond on a different timetable. A chart showing lower new-lease rents is therefore compatible with a firmer reading in the shelter component of CPI.
The report will have particular value if the monthly headline and core figures move in the same direction and the detail shows several contributors. A result driven mostly by one category calls for a narrower interpretation. The data can still move prices either way because traders have positions to adjust as soon as the figures arrive.
How interest rates reach a market that trades all weekend
Bitcoin has no coupon. Investors comparing it with cash or short-term government debt have to weigh its potential price move against the return available elsewhere while they wait. When short-dated yields rise, leaving capital in Treasury bills can pay more even though nothing has changed in Bitcoin’s issuance schedule.
The decision also reaches investors who use borrowed money or hold Bitcoin as one side of a trade. The price of financing the position and the collateral it requires affect the return. A firm can reduce a crypto position because its overall portfolio became more expensive to finance, even if its long-term view of Bitcoin stayed the same.
The two-year Treasury yield is a useful comparison around the CPI release because it responds to changes in the expected policy path. Longer-dated yields can also move with growth expectations and the compensation investors demand for holding debt over time. A rise in both yields is a different starting point from a sharp move at the short end alone.
The dollar adds context. Its response to US data can depend on the outlook for policy abroad as well as the expected Fed decision. A stronger dollar and rising yields alongside a decline in Bitcoin would fit a rates-driven explanation, particularly if the moves occurred at the release. The same readings measured at different times would make that comparison weaker.
US technology stocks offer another check once the regular session opens. A simultaneous decline can show investors reducing exposure across risk assets. A move confined to crypto gives more reason to examine leverage and crypto-specific demand. Either comparison needs a common observation window because Bitcoin has already been trading for hours before US stock markets open.
The October jobs release and the CPI report also land in different trading conditions. The latest ETF figures ahead of Monday describe the previous US trading week. Bitcoin’s weekend trading and Monday’s fall could reflect buyers and sellers that had no opportunity to make a corresponding ETF trade during the closed sessions.
Why ETF turnover and net flows can move apart
When an ETF share trades, one investor buys it from another. The trade contributes to volume even if the number of fund shares outstanding stays the same. Net subscriptions and redemptions are a separate measure of activity at the fund level.
A spike in ETF turnover on Tuesday could therefore accompany a small net flow. The reverse is also possible if a large redemption drives the fund’s net figure without an unusually busy session across all the products. The two figures help answer whether people traded fund shares and whether the fund category gained or lost capital on balance.
Changes in assets under management need a third distinction. A fund’s Bitcoin holdings are worth less in dollars after a price decline even if the number of coins stays the same. A decline in fund assets is therefore a combination of market performance and flows unless the data specifically separate the two.
Friday’s figures make the distribution of flows visible. IBIT had a $403 million net withdrawal while FBTC took in $42.8 million. The two entries demonstrate that investors did not move uniformly across issuers. They do not establish that the same investors redeemed one fund and bought the other.
Wednesday was the only positive session in the five-day comparison. The $74.6 million inflow offset part of the earlier withdrawals, then Thursday’s $430.2 million outflow more than reversed it. The sequence shows why a single positive day carries less information about a sustained change than several sessions with participation across issuers.
An investor can also exit an ETF as part of closing a hedged trade. The ETF sale would appear in the fund data if it led to a net redemption, while the associated move in another market would have to be measured separately. The flow table cannot distinguish that trade from a shareholder who simply reduced long exposure.
The earlier week therefore gives a benchmark for the sessions after CPI. Smaller withdrawals would indicate that less capital was leaving the group. A swing to net buying across several products would be a different change. The scale and distribution of the flows matter alongside their sign.
What Ether and the rest of the market can show
Farside’s Ether ETF table also showed weekly outflows for 2 to 6 November. The Bitcoin and Ether figures together describe withdrawal pressure across the two large US spot crypto fund categories. They do not establish the size of investment flows into smaller assets or activity outside those funds.
Bitcoin and Ether have different sources of demand. Ether can respond to expectations about staking and activity on Ethereum. Bitcoin has a different set of holders, trading products and investment uses. Both can still sell off at the same time if investors reduce risk across a portfolio.
The relative ETH/BTC price helps interpret a dollar rebound. Ether can rise in dollars while losing ground against Bitcoin, which would show that it participated but lagged. If Ether also gains against Bitcoin, the bounce may be reaching beyond the asset that led the initial response.
For smaller tokens, a large percentage move can reflect a thin order book. A few trades can shift the quoted price sharply if few orders stand between the current price and the next buyer or seller. The extent to which trading continues after the initial move can be more informative than the size of the first bounce.
Those measures can also disagree. Bitcoin can hold gains even as smaller coins weaken, or several tokens can rally while US fund demand remains negative. A market outlook should separate the evidence for a Bitcoin recovery from the evidence for a sustained recovery across crypto.
Earlier trading above $80,000 shows what liquidations can do
Bitcoin moved above $80,000 earlier in November as short liquidations accelerated. That episode offers a reference for how rapidly a change in positioning can move the price even after withdrawals from US funds.
A short liquidation adds a buy order to close exposure. If the buying pushes the market towards other traders’ liquidation levels, it can set off additional orders. The resulting price move can be substantial before a new group of discretionary buyers decides whether to hold the price at that level.
The reverse mechanism applies when heavily leveraged longs are forced out. Selling can drive the price towards levels where more positions are liquidated. Once those orders are executed, the market can bounce even if the reason investors reduced exposure in the first place remains.
Open interest helps put those moves in context. A decline alongside a price increase is consistent with traders closing positions. It cannot identify every position that closed. Funding rates and liquidation feeds can help distinguish a rush to cover from a session in which new buyers arrived.
Funding rates on perpetual contracts indicate which side is paying to maintain exposure and how expensive that exposure has become. A move higher in price alongside a sharp rise in the cost of going long can indicate that leveraged buyers are joining. Sustained spot demand would supply separate evidence that buyers are willing to hold the market at the higher price.
The $80,000 move also illustrates the importance of the observation period. The price achieved during a short squeeze says little about whether it can hold through a US session or the following day. A report on Tuesday should distinguish the high or low reached during the initial reaction from the range in which trading continued later.
How to read three possible CPI reactions
A softer reading could bring down short-term yields and reduce expectations for a December rate increase. Bitcoin might respond quickly if traders had positioned for a strong report. If prices stayed higher into the US close and several funds took in capital, that would add evidence of buying beyond the initial adjustment in derivatives.
A hotter reading could reinforce the argument made by the October dissenters. If yields rise and Bitcoin revisits Monday’s low, the next question is how quickly buyers absorb sell orders there. A brief breach and recovery in the first minutes gives a different account from a move that persists across spot venues through the session.
A mixed report could create two reactions in quick succession. Traders may initially respond to the headline, then reverse positions after seeing which components drove it. A report near expectations can also produce a large move if one side of the market had become crowded before release.
The first observation will come an hour before the regular US equity market opens. Bitcoin and Treasury markets can respond during that window. The equity open introduces trading in technology stocks and the regular session for ETF shares, giving a second observation after a different set of orders arrives.
Fund flows provide a later measure. The complete daily figure may become available after preliminary issuer entries appear. Comparing a partial reading with a fully reported Friday total can exaggerate the difference, especially if one of the larger funds has yet to report.
A comparison across the release, the equity open and the US close would help identify which part of the move held. The direction of Treasury yields and the dollar would give context for the first reaction. Spot volume, futures positioning and fund flows would show whether crypto demand subsequently supported it.
The Fed still has another month of evidence to weigh
CPI can influence market expectations without being the Fed’s preferred inflation gauge. The personal consumption expenditures price index has different coverage and weights. A large CPI surprise can matter immediately because it provides new information before later releases, while the details still need to be translated into the measures policymakers follow.
The December decision will also depend on activity and employment data that follow. Further evidence of weakening demand could change how officials interpret a firm inflation reading. Another strong set of data could keep the argument for higher rates in play even if October inflation slows from September.
The price of a December futures contract is an observation made at a particular time. A rate probability calculated from it can move as traders receive reports, adjust positions or respond to official remarks. A comparison of the estimate immediately before CPI with the estimate after trading settles is more informative than a level quoted without its time.
Bitcoin can recover while the expected policy path remains restrictive if enough buyers absorb available supply. That makes improvements in fund flows and sustained spot trading relevant even if the immediate rate reaction disappoints. It also means a softer report cannot guarantee a recovery if buying fades after the first move.
The previous week’s $1.28 billion in withdrawals is the comparison for the next ETF sessions. The monthly inflation figures due Tuesday will show whether price pressures eased from September. The completed flow totals will show whether investors returned to Bitcoin funds after seeing the report.
The first price level to compare after the release
Bitcoin’s move below $75,000 on Monday puts that area in focus before the new figures arrive. A return above it would show that buyers had recovered some of the ground lost before CPI. It would take trading at higher levels over a longer window to establish whether the move extended beyond the first reaction.
The Friday move above $76,000 supplies a second comparison. It occurred despite large withdrawals on the preceding day and did not prevent Bitcoin from moving lower on Monday. A new recovery to that area would have a different context if short-term yields had declined and demand for spot ETFs had improved.
A drop below Monday’s low would also need context. Orders can cluster near a visible low, and a rush through that area can be followed by a quick reversal. A lower trading range that holds through the active US session would give stronger evidence that the market had accepted the move.
The price comparison should use the same source at both points. Exchanges can print different highs and lows during fast trading, particularly if liquidity is thin. Comparing the wick from one venue with a later composite price can overstate the significance of a breach.
The same problem applies to trading volume. More volume during the first minutes after CPI is normal for a scheduled release. The useful question is whether it remains elevated as prices settle and which venues account for the activity. A move dominated by perpetual contracts has different support from one accompanied by buying on several spot venues.
There can also be a divergence between the regular close and the following Asian session. Bitcoin trades while US funds are closed. If the post-CPI move reverses overnight, it would be possible for the US fund data to show demand during a session whose price gains did not last.
The market therefore has two distinct opportunities to test the move. The first is the change in rates, the dollar and prices when the data are released. The second is what happens once US funds have traded a full session and crypto has had time to absorb the orders.
A rebound that meets those tests would have more evidence behind it than the weekend’s brief recovery. The first usable evidence will be the monthly CPI detail and the market reaction at 8:30 a.m. Eastern time. The fund tables will supply a later comparison with the five sessions that produced the $1.28 billion withdrawal.
What to Watch
- October CPI: The monthly headline and core figures will show how prices moved while most annual comparisons are unavailable.
- Rate expectations: December rate pricing and Treasury yields can show whether the release changes the market’s policy expectations.
- Fund flows: The fund-level figures will show whether new demand extends across several spot Bitcoin ETFs.
- Spot and derivatives activity: Spot volume and futures open interest can help distinguish a rebound backed by buyers from one driven by position closures.
FAQs
Why does CPI matter to crypto this week?
The jobs report already changed the backdrop for December rate expectations. The inflation report gives traders another measure with which to assess whether policy may stay restrictive.
How much did spot Bitcoin ETFs lose last week?
The five rounded Farside entries from 2 to 6 November sum to $1,281.7 million in net outflows. Wednesday was the only positive day, and Thursday’s $430.2 million withdrawal was the largest of the week.
Why will some annual CPI figures be missing?
Most October 2025 indexes were unavailable after the funding lapse. Without an index from the same month last year, the BLS cannot produce the standard 12-month comparison for those series.
What time is CPI released in India?
The release is scheduled for 7 p.m. IST on 10 November, which is 8:30 a.m. Eastern time. Bitcoin can react immediately, an hour before regular US stock and ETF trading begins.
Why can Bitcoin rise while spot ETFs report withdrawals?
Bitcoin trades around the clock across venues. US ETF flows measure net activity in a particular set of funds on a particular trading day. Other buyers can support the price, and the price quote may refer to a later period.
Is a monthly CPI rate comparable to an annual reading?
The monthly rate measures the change over one month. An annual comparison measures the change over 12 months. Extrapolating the monthly pace produces a hypothetical annualised rate rather than the official annual comparison.
Can ETF flows show why investors redeemed?
The totals show how much money moved on a net basis. They do not identify whether shareholders cut long exposure, unwound a hedged trade or moved capital to another product.
When can ETF data help assess the CPI reaction?
Bitcoin and Treasury markets can respond as soon as the data are released. Fund flows for the relevant US trading session offer a later check on whether the initial move coincided with broader demand for ETF exposure.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, legal or tax advice. Cryptocurrency activities carry risks, including loss of funds. Readers should conduct their own research and consult a qualified professional where appropriate. Information reflects publicly available material as of 9 November 2026 and may change as new information becomes available.
