Bitcoin advanced on Tuesday

(MENAFN- MENAFNEditorial) Bitcoin advanced on Tuesday, erasing the previous losses as US and global bond yields retreated. Lower oil prices, supported by expectations of additional Russian diesel supply, have eased some inflation concerns and reduced pressure on Treasury yields, creating a more favourable backdrop for Bitcoin. The energy outlook remains fragile, however. Any setback to Russian supply delivery or renewed escalation in the Middle East could quickly push crude higher, revive inflation concerns and drive global yields higher again.

The rebound lacks strong institutional support. Spot Bitcoin ETFs recorded USD 65 million in net outflows on Monday, taking October flows to negative USD 451 million. Without a recovery in ETF flows, the rebound remains less robust and more dependent on favourable moves in oil and yields. Corporate demand has also been relatively modest. Strategy purchased 250 BTC last week but allocated substantially more capital to repurchases of its preferred stock.

Looking ahead, Wednesday's US inflation data and Thursday's producer prices could prove pivotal for monetary policy expectations. Markets expect the Federal Reserve to remain on hold this month but still price in one rate increase before year-end and several more in the following meetings. Softer inflation could pull yields lower and cast doubt on later moves, providing support to Bitcoin. Persistent price pressures could fuel tightening expectations, lift yields and place renewed downward pressure on the cryptocurrency. At the same time, a renewed rise in energy prices could reinforce the same outlook.

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