Bitcoin is anticipating the release of the September US Consumer Price Index (CPI) on October 24, marking the first significant data point since the federal government shutdown commenced.
Analysts from The Kobeissi Letter highlighted the significance of this update, noting that it will be the first CPI announcement on a Friday since January 2018, occurring just five days before the Federal Reserve’s meeting on October 29.
Additionally, as the Labor Department has paused all other major data releases until the shutdown concludes, this CPI report will serve as the sole inflation indicator for the Fed.
This singularity increases the stakes, as there will be no recent jobs, payroll, or producer-price data to provide context.
Inflation Outlook
The latest CPI report showed US inflation at 2.9% in August, a slight rise from 2.7% in the previous month.
In light of this, Wells Fargo economists now anticipate that September’s figure will increase modestly to 3.1%, still within a range indicative of gradual disinflation. Core prices, which omit food and energy, are expected to remain stable, suggesting that inflationary pressures are easing but not entirely eliminated.
In financial markets, traders are already positioning for potential policy adjustments. According to the CME FedWatch Tool, futures indicate a 99% likelihood that the Fed will cut rates during its October 29 meeting and an 85% chance of another reduction in December.
Importantly, a softer CPI reading would likely strengthen this outlook and diminish the dollar’s value, while a hotter-than-expected figure could temporarily reignite rate-hike speculation.
Bitcoin’s Response
Kautious Data analysts indicated that the CPI’s influence on crypto remains direct, as the current “weaker macro signals could create a near-term bullish scenario for crypto narratives while introducing tail risks for broader markets.”
The firm noted that a core reading below 0.3% month-over-month would bolster a dovish stance, putting pressure on the dollar and favoring assets like gold, equities, and Bitcoin.
Conversely, a stubborn inflation result, especially if services and shelter costs exceed 0.4%, might strengthen the dollar and negatively impact risk assets.
The firm also pointed out that crypto markets frequently experience “pre-release rallies and post-print sell-the-news actions” as volatility increases and funding adjusts.
Meanwhile, Dean Chen, an analyst at digital asset firm Bitunix, told CryptoSlate that market reactions will depend on how investors re-evaluate risk following the release.
He remarked that the market could maintain the current “high-for-longer but stable” narrative if the data aligns with expectations, allowing Bitcoin to continue consolidating near recent peaks.
However, a stronger core figure might elevate Treasury yields and the dollar, prompting a short-term correction from the upper range.
Furthermore, Chen added that a cooler CPI could encourage ETF inflows and push Bitcoin towards the $117,000-$120,000 range, while a hotter report could redirect capital back to safer assets, testing support around $100,000.
He concluded:
“Traders should monitor real-time shifts in US yields and the dollar after the release: a simultaneous increase in both would pressure Bitcoin, while a drop could rekindle risk appetite. In this environment, volatility remains high, and the sustainability of ETF inflows will be crucial for whether Bitcoin can regain momentum after the data.”
