Bitcoin, Ethereum and XRP fall as ETF inflows slow ahead of US inflation data

Top cryptocurrencies have pulled back this month as investors booked profits following rallies in August and September. Bitcoin retreated to $83,350 on Sunday from its September high of $87,200. Ethereum slipped to $2,533 from its September peak of $2,806. XRP fell to $1.4093 from a high of $1.6555. The market capitalization of all coins dropped to $2.8 trillion from over $2.9 trillion in September.

There are signs that American investors are starting to book profits after the recent surge. Spot Bitcoin ETFs recorded over $388 million in outflows this month. The outflows reversed inflows of $2.65 billion in October. The funds added $3.52 billion in the previous month. Ethereum ETFs recorded outflows for the last nine consecutive days. Ethereum ETFs lost over $634 million this month after adding $832 million in September and $1.85 billion a month earlier.

However, XRP funds performed better, adding $12.09 million this month. XRP funds received over $121 million in September. XRP funds received $159 million in August. ETFs of other altcoins, including Dogecoin, Hedera and Zcash, also recorded outflows. Futures open interest slipped in the past few days to the current $142 billion from a high of $158 billion on September 21.

The cryptocurrency price declines occurred as US bond yields continued rising. The ten-year yield rose to 5.36%, its highest level in over two decades, from a year-to-date low of 3.92%. Bitcoin and other risky assets tend to underperform the market when bond yields rise. Rising bond yields also explain why gold and other precious metals have pulled back in the past few weeks.

The upcoming US consumer inflation report will provide indications about what to expect from the Federal Reserve. Economists expect the report to show that inflation continued rising last month. Economists estimate that the consumer price index rose to 3.6%. Economists estimate that the core consumer price index rose to 2.6%. The inflation readings will influence the Federal Reserve. However, economists expect the Federal Reserve to leave rates unchanged between 3.75% and 4% at this meeting because of the weak nonfarm payrolls report.