Tomorrow night at 20:30, the U.S. will release September CPI. This is the last inflation report before the Fed’s October 28 rate decision, so $BTC the direction of the market over the coming week may well hinge on this one report ⏰
1️⃣ Data expectations: Inflation is still rising
According to data compiled by DailyCoin, the market expects September CPI to come in at 3.6% year over year (previous: 3.4%), with core CPI at 2.5% (previous: 2.4%). The Fed raised rates once in September, and if the data comes in hotter than expected, rate-hike expectations could heat up again, pushing the dollar and Treasury yields higher. Crypto assets would be among the first to take a hit.
2️⃣ Funding flows: Institutions are pulling out
According to Bitcoin.com, BTC spot ETFs saw net outflows of about $680 million last week, while ETH spot ETFs have recorded net outflows for nine consecutive trading days. Binance data (10:59): BTC is down 3% over the past 7 days, and ETH is down 7.6%—more than twice BTC’s decline.
3️⃣ Sentiment: Retail traders are buying the dip
The BTC futures long/short account ratio has risen to 1.56 from 1.38 24 hours ago, while open interest has fallen 1.64%. Accounts are adding longs as big money exits. In this setup, if the data comes in hawkish, longs could face a wave of liquidations.
BTC 4-hour structure (Binance, 10:59)
Price is currently ranging between 80,394 and 87,220, with 83.8k–84.0k acting as confluence resistance from Fib 0.5 (83,807) and MA99 (84,013).
Plan 1 (primary): Place a short near 83,900 on a rebound, with a stop at 84,700 (above Fib 0.618). Target 1: 82,500; target 2: 80,500.
Plan 2 (backup): If bearish data triggers a direct drop to 80,500 (above this week’s low of 80,394), place a long to buy the dip. Stop at 79,900; target 82,500.
Invalidation: A 4-hour close above 84,700 would mean the market has absorbed the positive data, invalidating the short thesis. The next upside level is the previous high at 87,220.
A quick note on ETH: The 4-hour structure is bearish, with 2,572–2,588 as resistance (overlapping with Fib 0.5 at 2,592). A rebound to this area is also a potential short entry. Stop at 2,605; first downside target: 2,406.
Also, according to CoinDesk, about $1.25 billion worth of BTC options expire this Friday, which could amplify volatility after the data release.
My view: Don’t chase trades ahead of CPI. Set orders on both sides and use stop-losses—let the data choose the direction for you.
Do you think CPI will come in above expectations this time?
Sources: DailyCoin, Bitcoin.com, CoinDesk, Binance market data
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⚠️ The above is a summary of information and personal opinion, and does not constitute investment advice. DYOR.