Bitcoin Price Dips Ahead of U.S. CPI Report and Potential Fed Rate Shift
Bitcoin traders are once again on edge ahead of a key U.S. inflation report that could determine whether the Federal Reserve leans hawkish or dovish in the coming weeks. The outcome of Thursday’s Consumer Price Index (CPI) release is expected to set the tone for the next major market move, with traders weighing macroeconomic data against shifting risk appetite.
After a brutal $19 billion liquidation event on October 10, sentiment briefly improved last week as geopolitical tensions eased and technical indicators strengthened. However, optimism has cooled as investors await the U.S. October CPI report—the second inflation print since the government shutdown began 43 days ago.
Inflation Holds Steady, But Uncertainty Remains
According to FXStreet consensus estimates, October’s year-over-year inflation is projected to remain flat at 3%. Still, uncertainty lingers over whether the data will be released on time, HashKey Group Senior Researcher Tim Sun told Decrypt.
Sun emphasized that the October figure, along with any delayed September data, will “directly determine how traders price in a potential rate cut in December” and serve as “the benchmark for short-term market positioning.”
The odds of a December rate cut have slipped to 67.9%, down from 85% last week, according to FedWatch data—reflecting Fed Chair Jerome Powell’s recent hawkish tone.
Bitcoin Slides as Risk Appetite Fades
A cooler CPI print could reignite bets on a dovish Fed, weakening the U.S. dollar and potentially boosting Bitcoin and other risk assets. But a hotter-than-expected reading could strengthen the dollar and deepen losses in crypto markets.
Bitcoin has already fallen 2.7% to $103,600 in the past 24 hours, wiping out Sunday’s gains, CoinGecko data shows.
“Yesterday’s decline can be directly attributed to a broad-based reduction in risk appetite,” Sun said, citing a rotation from tech stocks to blue-chip equities as a sign of investor caution amid ongoing macro and geopolitical uncertainty.
Despite the weak sentiment, Sun noted that any clear signal of a rate-cut path or liquidity easing could “restore risk appetite” and “support a price rebound across risk assets.”
