Toscale Digest: BTC Hits $87K Amid EU Inflation Shock (6h)

Bitcoin reclaimed the $87,000 level as short sellers faced liquidation pressure and spot ETF inflows surged. Concurrently, EU inflation data came in significantly hotter than expected, complicating the macro backdrop for risk assets. Investors are now weighing strong crypto fundamentals against persistent price stability concerns highlighted by Toscale.

Bitcoin rallied to its highest point since late September, wiping out $122 million in short positions as sell walls above $85,000 dissolved. This momentum was fueled by $102.7 million in US spot Bitcoin ETF inflows recorded on October 1. The asset is currently testing resistance levels that previously capped its upside.

In the altcoin sector, the Drift Foundation has opened redemptions for DFX tokens following a major Solana exploit. Victims can now claim losses exceeding $290 million, with initial redemption rates set at approximately 0.0104 USDT per dollar lost. Recovery efforts are supported by Tether and strategic partners, though claims must be filed before January 2028.

Regulatory developments also shifted as the SEC proposed a new custody framework allowing certain funds to hold their own crypto keys. This proposal addresses critical questions regarding evidence preservation for irreversible transactions and private key security protocols within regulated investment advisers.

Calendar — past:

EU Inflation Rate YoY Flash came in at 4.2%, significantly beating the 3.6% forecast and rising from 3.2%. EU CPI Flash Estimate y/y also surprised to the upside at 4.2% versus a 3.7% forecast. In the US, Unemployment Change showed an increase of 23.587K against a forecast of 17.6K.

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The market focuses on US labor data with Non-Farm Employment Change forecast at 89K against a previous 162K. Average Hourly Earnings m/m is expected to hold at 0.3%. The Unemployment Rate is forecast to remain steady at 4.1%.

Market read: Bitcoin's surge above $85,000 indicates strong buyer conviction despite broader macro headwinds from EU inflation. The discrepancy between hot EU price data and upcoming US labor reports creates a volatile environment for risk assets. Traders are closely monitoring whether the Fed will interpret these mixed signals as persistent inflation or transitory noise. A stronger-than-expected US jobs report could dampen crypto momentum by reinforcing hawkish rate expectations. Conversely, weak labor data might support further BTC gains as investors seek non-sovereign stores of value.