- The U.S. Consumer Price Index (CPI) for September will be released after a period of limited economic data due to the government shutdown.
- September inflation is expected to show a 3.1% year-over-year increase, up from 2.9% in August, marking an 18-month high.
- Ethereum (ETH) is predicted to experience larger price swings than Bitcoin (BTC) following the CPI release, with expected volatility of ±2.9% versus ±1.4% for Bitcoin.
- Market experts suggest the CPI figure may influence the U.S. dollar’s strength, which could affect cryptocurrency price movements.
- Projected price volatility reflects normal market fluctuations and does not indicate a clear bullish or bearish trend.
The U.S. Consumer Price Index (CPI) for September will be published on Friday at 12:30 UTC, ending a stretch of sparse economic updates caused by the government shutdown. The report is expected to provide key information on inflation that could impact cryptocurrency markets.
Economists surveyed anticipate the CPI to show a 3.1% rise in consumer prices compared to the previous year, an increase from August’s 2.9% and the highest level seen in 18 months. Monthly inflation is forecasted to grow by 0.4%, matching the prior month’s rate. Core inflation, which excludes volatile food and energy costs, is predicted to hold steady at a 3.1% annual increase with a 0.3% gain for the month.
Analysts expect that regardless of whether the data beats or misses expectations, the Federal Reserve will likely proceed with a quarter-point interest rate cut next week. Some analysts note that a higher-than-expected inflation reading could strengthen the U.S. dollar. According to experts at ING, a firmer dollar may limit gains in the cryptocurrency market. “We don’t think U.S. CPI will offer that opportunity as we expect a consensus 0.3% MoM core print. But surely with 50bp of easing fully priced in by year-end, any hot print could offer good support to the dollar,” ING analysts stated.
In contrast, a lower inflation figure might encourage a more positive market reaction, as noted by Zerocap, a digital asset trading firm. John Toro, head of trading at Zerocap, said in an email, “The U.S. government shutdown has starved keen market analysts of often crucial data … a lower CPI reading could easily stoke bullish sentiment amid an ongoing retail selloff.”
Options data from Deribit show that ether (ETH) could move by about ±2.9% after the CPI release, outpacing bitcoin’s (BTC) expected ±1.4% fluctuation, according to Markus Thielen, founder of 10x Research. Volatility indices from Volmex Finance also predict similar price movements, with XRP and Solana expected to move approximately 4.7% and 4% respectively within 24 hours.
While these volatility levels indicate potential price swings, they are within normal ranges and do not imply a directional market bias. Thielen noted that technical indicators suggest possible easing of downward momentum in bitcoin, potentially leading to a short-term price recovery. He explained, “The daily stochastic indicator is showing signs of bullish divergence, even though it has not yet reached its typical 15% lower bound.”
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