On Sunday, economic data from China revealed a further weakening in demand, adversely impacting market risk sentiment. Producer prices declined by 2.8% year-on-year in September after falling 1.8% in August. Producers typically reduce prices as demand weakens, passing savings on to consumers.
The inflation figures were significant as investors anticipated fiscal stimulus measures from Beijing. However, China’s Ministry of Finance (MoF) failed to introduce stimulus measures, on Saturday, targeting consumer consumption. A continued deterioration in the world’s second-largest economy may have wide-reaching effects on demand for riskier assets, including BTC.
Meanwhile, US economic indicators continued to fuel expectations of a soft US economic landing, which may have limited BTC’s losses.
US BTC-Spot ETF Inflows: A Silver Lining?
US BTC-spot ETF market flow trends reflected investor optimism toward the Fed rate path and economy. On Friday, October 11, the US BTC-spot ETF market saw net inflows of $253.6 million, with total net inflows of $348.5 for the week ending October 11.
US BTC-spot ETF flow trends are significant for supply-demand trends. Oversupply risk lingers following the recent US appellate court ruling, allowing the US government to sell 69k BTC related to the Silk Road.
In total, the US government has a stockpile of 203,239 BTC. Plans to sell a sizeable portion could disrupt the supply-demand balance, especially if US BTC-spot ETFs are unable to absorb the excess supply.