The U.S. CPI report for September is scheduled for release today at 8:30 a.m. ET, and crypto traders are watching closely. The data was delayed due to the ongoing government shutdown, now in its 24th day.
Economists are forecasting a 0.4% month-over-month rise and 3.1% annual inflation, which would mark the first time CPI surpasses 3% in 2025, a critical threshold for both traditional and crypto markets.
According to crypto analyst Ash Crypto, “Investors should watch this CPI release closely, it could shape everything from interest rate expectations to risk-on assets like stocks and crypto.”
CPI Forecast and Potential Market Reactions
In a detailed X post, Ash Crypto outlined three potential CPI outcomes that could impact the crypto market’s short-term direction.
1: CPI Above 3.1% – Bearish Outlook for Bitcoin and Ethereum
If the CPI reading comes in above 3.1%, it would mark the highest inflation print since June 2024, a scenario that’s likely bearish for risk assets.
“Higher inflation could force the Federal Reserve to maintain or even raise interest rates,” Ash noted.
That typically slows economic growth and makes riskier assets, such as Bitcoin and Ethereum, less attractive, potentially triggering a short-term market pullback.
Scenario 2: CPI Exactly at 3.1% – Neutral but Slightly Hawkish
If CPI hits exactly 3.1%, meeting expectations, the analyst still warns of a cautious market response. Even a 0.2% month-over-month increase annualizes to approximately 2.4% inflation, which is slightly above the Fed’s 2% target.
“This could push Fed Chair Jerome Powell to maintain a hawkish stance, keeping risk-on sentiment limited until we see more clarity from the central bank,” Ash added.
Scenario 3: CPI Below 3.1% – Bullish Catalyst for the Crypto Market
The most bullish scenario for crypto is if CPI comes in below 3.1%. Lower inflation increases the likelihood of rate cuts, encouraging liquidity inflows into risk assets such as stocks and cryptocurrencies. A 0.1% monthly rise, or 1.2% annualized, would signal that inflation is under control and could spark a crypto rally.
“This could be the green light the market’s been waiting for,” said Ash Crypto, suggesting that Bitcoin and Ethereum could see renewed momentum.
CPI Impact on Crypto Market
The upcoming CPI report is expected to shake up the crypto market, with Ether projected to be more volatile than Bitcoin. Analysts predict ETH could swing 2.9%, while BTC may move 1.4% in response to the data.
Market sentiment has shown a notable increase in optimism around inflation trends recently. However, if CPI surprises to the upside, the U.S. dollar may gain strength, potentially putting short-term pressure on crypto assets.
An X user, Rekt Specter, predicted a chain reaction, saying:
“If CPI drops below expectations, we’ll likely see rate cuts, liquidity flooding in, and a parabolic rise in Bitcoin.”
This sentiment reflects the growing anticipation that a softer CPI print could ignite a market-wide surge.
Despite optimism, several analysts warn that volatility may spike immediately after the report.
Research firm 10x Research noted bearish skews in Bitcoin and Ethereum options, indicating that some traders are shorting Bitcoin while buying longer-term Ethereum calls.
Meanwhile, on-chain data from Glassnode reveals stress among short-term holders.
Analyst Ali Martinez cautioned that,
“If Bitcoin falls below the short-term holder realized price, it could dip toward the long-term holder realized price near $37,000.”
This suggests that even a brief inflation surprise could cause temporary selling pressure before markets stabilize.
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FAQs
The CPI (Consumer Price Index) measures inflation. High inflation can lead to higher interest rates, making risky assets like crypto less attractive, while low inflation is typically bullish.
A high CPI can cause Bitcoin’s price to drop due to fears of rising interest rates. A lower-than-expected CPI often boosts Bitcoin as it suggests potential rate cuts and increased market liquidity.
The U.S. CPI report is scheduled for release at 8:30 a.m. Eastern Time. This key economic data can cause significant volatility in both traditional and crypto markets upon its release.
A high CPI is generally bad for Bitcoin. It suggests persistent inflation, which may prompt the Federal Reserve to maintain or raise interest rates, reducing the appeal of risk-on assets like cryptocurrency.
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