Bitcoin eyes CPI test as shutdown clouds Fed rate outlook

Bitcoin is bracing for the release of the September US Consumer Price Index (CPI) on Oct. 24, the first major data point since the federal shutdown began.

Analysts at The Kobeissi Letter emphasized the importance of this update, noting that it will be the first CPI release on a Friday since January 2018 and comes just five days before the Federal Reserve’s Oct 29 meeting.

Moreover, with the Labor Department halting all other major data releases until the shutdown ends, this CPI report will stand alone as the Fed’s key inflation gauge.

That isolation raises the stakes as there will be no fresh jobs, payroll, or producer-price data to balance the picture.

Inflation forecast

The most recent CPI report showed US inflation at 2.9% in August, a slight uptick from 2.7% the previous month.

Considering this, Wells Fargo economists now expect September’s reading to rise modestly to 3.1%, still within a range consistent with gradual disinflation. Core prices, which exclude food and energy, are projected to remain steady, signaling that inflation pressures are easing but not gone.

Across financial markets, traders are already positioning for potential policy easing. According to the CME FedWatch Tool, futures data show a 99% probability that the Fed will cut rates at its Oct. 29 meeting and an 85% chance of another reduction in December.

Notably, a softer CPI reading would likely reinforce that outlook and weaken the dollar, while a hotter-than-expected print could briefly revive rate-hike speculation.

Impact on Bitcoin

Kautious Data analysts said the CPI’s impact on crypto remains direct as the current “thinner macro signals can be a near‑term bullish setup for crypto narratives while adding tail risk for broader markets.”

According to the firm, a softer core reading below 0.3% month-over-month would support a dovish outlook, pressuring the dollar and favoring assets such as gold, equities, and Bitcoin.

However, a stickier inflation result, particularly if services and shelter rise above 0.4%, could strengthen the dollar and weigh on risk assets.

The firm also flagged that crypto markets often stage “pre-release rallies and post-print sell-the-news reactions” as volatility spikes and funding turns.

Meanwhile, Dean Chen, an analyst at digital-asset firm Bitunix, told CryptoSlate that the market reaction will hinge on how investors reprice risk after the release.

He stated that the market could sustain the current “high-for-longer but stable” narrative if the data meet expectations, which would allow Bitcoin to continue consolidating near its recent highs.

However, a stronger core figure might lift Treasury yields and the dollar, triggering a short-term correction from the upper range.

Moreover, Chen added that a cooler CPI could renew ETF inflows and push Bitcoin toward the $117,000-$120,000 zone, while a hotter report might drive capital back to safer assets, testing support near $100,000.

He added:

“Traders should watch real-time movements in US yields and the dollar following the release: a simultaneous rise in both would pressure Bitcoin, while a retreat could reignite risk appetite. In this environment, volatility remains elevated, and the sustainability of ETF inflows will determine whether Bitcoin can regain momentum post-data.”