Bitcoin edges up to $78,724 as oil falls, but OPEC+ hold keeps Fed risk alive
In brief
- Bitcoin rose about 1% to roughly $78,724 early Monday, per CryptoSlate data.
- Brent crude fell about 3% to $110; the dollar index slipped 0.5% to 101.45, CryptoSlate reported.
- OPEC+ held December production targets steady in its Nov. 1 decision, CryptoSlate reported.
- Gasoline drove more than half of September's 0.6% CPI rise, per BLS data cited by CryptoSlate.
- October US inflation data and the EIA's updated oil outlook are due Nov. 10.
Oil and the dollar ease
Brent crude fell about 3% to $110 a barrel after trading above $114 on Friday, CryptoSlate reported. The dollar index slipped 0.5% to 101.45.
Ole Hansen, head of commodity strategy at Saxo Bank, attributed Monday's crude decline to reports that President Donald Trump favored giving diplomacy with Iran more time before potentially resuming military strikes after Tuesday's US midterm elections. Talks involving Qatari and Iranian officials have continued (though attacks on vessels near the Strait of Hormuz threatened further supply disruptions, per CryptoSlate).
Why OPEC+ matters for the Fed
Seven producers, including Saudi Arabia and Russia, kept their September production targets in place through December and didn't announce further increases, despite months of disruptions to Middle Eastern exports, CryptoSlate reported.
In CryptoSlate's view, that's the problem for Bitcoin.
CryptoSlate's analysis, by Oluwapelumi Adejumo, argues that constrained oil shipments could reinforce the Federal Reserve's reluctance to loosen monetary conditions. The Fed raised rates in September and then held them at 3.75% to 4% on Oct. 28, with two policymakers voting for another increase, CryptoSlate reported.
The piece points to fuel as a big driver of recent inflation. The Bureau of Labor Statistics reported that gasoline prices rose 9.1% in September, accounting for more than half of that month's 0.6% rise in consumer prices, as cited by CryptoSlate. Annual inflation hit 3.7%, and core inflation was 2.6%.
An earlier IMF study cited in the piece found that US monetary tightening lowers crypto prices by reducing investor risk-taking, and that the link has strengthened with institutional participation.
Forecasts point to tight supply
Goldman Sachs raised its December Brent forecast to $105 from $90, citing heightened geopolitical risks, CryptoSlate reported. The Energy Information Administration expects global oil inventories to fall by 700,000 barrels a day in the fourth quarter, though it said improving export routes could gradually restore supply.
The next test arrives on Nov. 10, when October US inflation data and the EIA's updated oil outlook are scheduled for release. According to CryptoSlate's analysis, softer fuel inflation could weaken expectations of further Fed tightening, while renewed price pressure would make it harder for Bitcoin to hold onto its recovery.
Frequently asked questions
Why does the OPEC+ decision matter for Bitcoin?
OPEC+ held December production targets steady on Nov. 1. CryptoSlate's analysis said that leaves Bitcoin exposed to renewed inflation pressure if oil shipments remain constrained, which could reinforce the Federal Reserve's reluctance to loosen monetary conditions. An earlier IMF study found US monetary tightening lowers crypto prices by reducing investor risk-taking.
What is the next macro event for Bitcoin to watch?
October US inflation data and the EIA's updated oil outlook were scheduled for release on Nov. 10. CryptoSlate's analysis said softer fuel inflation could weaken expectations of further Fed tightening, while renewed price pressure would make it harder for Bitcoin to sustain its recovery.
