Bitcoin is at a crucial juncture as markets hold their breath ahead of the US CPI release on October 24. This key macroeconomic data could push BTC towards $120,000 or trigger a sharp correction to $100,000. Traders are closely watching Fed signals amidst a federal shutdown scenario, intensifying the significance of this pivotal figure.
The timing of this CPI release carries exceptional significance that hasn’t escaped crypto analysts. For the first time since January 2018, the US Consumer Price Index will be released on a Friday, just five days before a crucial Federal Reserve meeting scheduled for October 29th. This compressed calendar leaves little room for markets and Bitcoin to digest the information before Jerome Powell and his team take a position on monetary policy.
The situation becomes even more tense due to the federal shutdown that has suspended all other major economic data publications. The Labor Department will not release employment figures, wage data, or producer price statistics. The CPI thus becomes the only inflation indicator available to the Fed for calibrating its decision. This absence of complementary data mechanically amplifies the weight of this single report on market expectations.
Economists at Wells Fargo anticipate inflation of 3.1% for September, a slight increase from the 2.9% recorded in August. This modest progression would remain consistent with the gradual disinflation trajectory observed over recent months. Core inflation, which excludes volatile components like food and energy, should according to them remain stable at around 0.3% month-over-month.
Fed Funds futures markets display a 99% probability of a rate cut at the October 29th meeting, according to the CME FedWatch tool. Even more significant, traders are pricing in an 85% probability of another reduction in December. This near-unanimous anticipation of monetary easing structurally supports risk assets like Bitcoin, but also creates a risk of disappointment if the data were to surprise to the upside.
Dean Chen, analyst at Bitunix, emphasizes that the market’s reaction will depend less on the raw figure than on how investors reposition their risk exposure. A CPI in line with expectations would likely keep Bitcoin in its current consolidation zone, around its recent highs. The price action would then remain in what he terms a “bullish for longer but stable” pattern, with a relatively narrow trading range.
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Analysts at Kautious Data identify two distinct macro scenarios with diametrically opposed implications for Bitcoin. A core CPI below 0.3% month-over-month would pave the way for an accommodative Fed outlook. This configuration would mechanically weaken the US dollar and favor flows into gold, stocks, and cryptocurrencies. In this context, Bitcoin ETF inflows could resume in full force and push the price toward the $117,000 to $120,000 zone.
The opposite scenario of higher inflation, particularly if services and housing exceed 0.4% month-over-month, would instead strengthen the greenback. US Treasury yields would instantly climb, exerting downward pressure on all risk assets. Bitcoin could then quickly lose its current support and test the psychological $100,000 barrier. Traders will need to monitor in real-time the correlation between DXY movements and yields to anticipate BTC’s direction.
Chen recommends particular vigilance regarding the sustainability of Bitcoin spot ETF flows after the data release. These investment vehicles have become the main channel for institutional capital entering the crypto ecosystem. A simultaneous rise in the dollar and bond yields could trigger net ETF outflows, amplifying selling pressure on the spot market. Conversely, a weakening of these two variables would revive risk appetite and support a bullish recovery for Bitcoin.
In conclusion, as trader Killa reminds us, recent CPI releases have all coincided with local Bitcoin tops. A correction toward $102,000 or below $100,000 before next week’s FOMC is increasingly probable.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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