Bitcoin Prepares for US CPI Release

Bitcoin is gearing up for the release of the US Consumer Price Index (CPI) for September, which is set to come out on October 24. This will be the first significant data available since the federal government shutdown began.

An analyst pointed out the significance of this upcoming report, noting that it’s the first CPI release since January 2018 and it arrives just days before a Federal Reserve meeting scheduled for October 29.

Moreover, this CPI will be the primary inflation gauge for the Federal Reserve since the Labor Department has halted the release of other major data during the shutdown.

This limited data landscape heightens uncertainty as there won’t be any new information on employment, payroll, or producer prices to consider.

Inflation Forecast

According to the most recent CPI report, inflation in the U.S. was at 2.9% in August, a slight increase from the 2.7% recorded the month before.

With that in mind, economists at Wells Fargo are forecasting a modest uptick to 3.1% for September, which still aligns with moderate disinflation trends. Core prices, excluding food and energy, are predicted to remain steady, suggesting that inflationary pressures are easing, albeit not entirely gone.

In financial markets, traders appear prepared for potential policy easing. Futures data indicates a 99% likelihood that the Federal Reserve will implement a rate cut during its meeting on October 29, along with an 85% probability of another cut in December.

Weak CPI data could bolster this outlook, potentially contributing to a weaker dollar, while stronger-than-expected results might momentarily reignite speculation about a rate hike.

Impact on Bitcoin

An analyst commented on the direct effects that the CPI might have on cryptocurrencies, suggesting that a dilution of macroeconomic signals could create a near-term bullish scenario for crypto, but it might also introduce risks for the broader market.

If the core index dips below 0.3% month-on-month, it could support a dovish outlook and apply pressure on the dollar, benefiting assets like gold, stocks, and Bitcoin.

Conversely, a stronger inflation reading could strengthen the dollar, creating headwinds for risk assets—especially if service and housing prices exceed 0.4%.

The analyst further cautioned that cryptocurrency markets often go through “pre-release rallies” followed by sell-offs once the data is published, leading to increased volatility.

Another analyst from a digital asset firm observed that market reactions will hinge on how investors reassess risk post-release.

He mentioned that if the data meets expectations, it could maintain the narrative of “long-term highs but stability,” allowing Bitcoin to keep consolidating near recent peaks.

However, if core inflation numbers rise, it might push Treasury yields and the dollar higher, causing a short-term correction in Bitcoin’s price.

He also indicated that a cooling CPI could stimulate ETF inflows, potentially pushing Bitcoin into the $117,000-$120,000 range, while a CPI increase might lead funds back to safer assets, testing support levels around $100,000.

Finally, he advised traders to monitor real-time shifts in US yields and the dollar following the announcement. If both rise concurrently, Bitcoin could face pressure. In contrast, a pullback might reignite risk appetite. Given the current environment, volatility remains elevated, and the continuity of ETF inflows will play a crucial role in whether Bitcoin can regain momentum after the data release.