President Donald Trump stated that a certain level of inflation could potentially pay off the $40 trillion United States national debt quickly, according to a report by @WatcherGuru on X. This statement marks a sharp reversal from his previous stance blaming the Joe Biden administration for the largest inflation in US history, alongside his claims that commodity prices were already falling sharply.
Trump’s comments coincide with stalled inflation indicators. Data from @unusual_whales on X shows the US Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) price index remain stuck at 3.4% - far from the 2% inflation target set by the Federal Reserve.
Favorable Signal for the US Dollar
Trump’s stance suggests the US government may begin tolerating higher inflation. This scenario immediately creates bearish sentiment for fixed-income instruments, while casting uncertainty over Bitcoin’s price trajectory.
Markets are focused on the probability of upcoming interest rate decisions. The odds of the Fed holding interest rates steady at its October meeting now dominate at 77%, while the prospect of a rate hike has shrunk to 23%. Analysts at Bitfinex warned that rising US Treasury yields risk putting interest rates back in control of market movements.
High Treasury yields directly increase the appeal of holding dollar-based assets. This dynamic strengthens the USD and ultimately dampens investor appetite for high-risk assets like crypto.
Critical Supply Zone at $84K
The impact of this macro sentiment pushed Bitcoin down 0.99% to $84,038, after the leading cryptocurrency briefly touched $87,220 during October 2 trading.
A massive supply overhang is stalling Bitcoin’s price recovery. Around 1.39 million BTC hold an acquisition cost basis within the $84,000 to $86,500 range, according to September 30 data. Bitfinex explained that if Bitcoin continues trading below $81,300 alongside ETF outflows, the market will receive confirmation of structural weakness.
According to a report by @lookonchain on X, institutional capital flows have not completely subsided. On October 1, Bitcoin ETFs still logged net inflows of $170.2 million or 1,383 BTC, bringing total weekly capital flows to a 2,467 BTC surplus. A contrasting trend hit Ethereum ETFs, which recorded net outflows of 23,436 ETH valued at $64.69 million.
Crypto investors must now weigh potential shifts in US fiscal policy as Bitcoin remains pinned within a dense sell-order zone.
Reported by @WatcherGuru on X.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
