All eyes are on the U.S. inflation report (CPI) for October, due out at 13:30 UTC.
The forecasts call for core inflation to come in at 0.2%, and headline inflation (which includes everything) at 0.3%—lower than last month, but still far from the Fed’s 2% target.
It matters because it’s the last piece of the puzzle before the Fed’s December 8–9 meeting.
The market is currently pricing in an 80% chance of a quarter-point rate hike (25 basis points).
That means the decision is almost a sure thing, but the report will determine how hawkish the Fed sounds afterward.
The relationship between CPI and Bitcoin isn’t direct; it’s about opportunity cost.
When inflation comes in higher than expected, the Fed stays hawkish and raises interest rates. That means returns on safe assets (like Treasury bonds) remain high, making Bitcoin, which doesn’t pay interest (a non-yielding asset), less attractive.
So any upside inflation surprise will put pressure on BTC, while any downside surprise will give it a chance to catch its breath.
Here are the possible scenarios 👇🏻
• If inflation comes in higher than expected (especially core inflation at 0.3% or more), the chance of a rate hike will jump above 80%, putting pressure on Bitcoin, and we could see support levels break.
• If inflation comes in below expectations or in line with them, we could see a relief candle and a modest rebound, since the market will have priced in the worst.
DYOR
$BTC
#CPITestsDecemberRateOutlook
The forecasts call for core inflation to come in at 0.2%, and headline inflation (which includes everything) at 0.3%—lower than last month, but still far from the Fed’s 2% target.
It matters because it’s the last piece of the puzzle before the Fed’s December 8–9 meeting.
The market is currently pricing in an 80% chance of a quarter-point rate hike (25 basis points).
That means the decision is almost a sure thing, but the report will determine how hawkish the Fed sounds afterward.
The relationship between CPI and Bitcoin isn’t direct; it’s about opportunity cost.
When inflation comes in higher than expected, the Fed stays hawkish and raises interest rates. That means returns on safe assets (like Treasury bonds) remain high, making Bitcoin, which doesn’t pay interest (a non-yielding asset), less attractive.
So any upside inflation surprise will put pressure on BTC, while any downside surprise will give it a chance to catch its breath.
Here are the possible scenarios 👇🏻
• If inflation comes in higher than expected (especially core inflation at 0.3% or more), the chance of a rate hike will jump above 80%, putting pressure on Bitcoin, and we could see support levels break.
• If inflation comes in below expectations or in line with them, we could see a relief candle and a modest rebound, since the market will have priced in the worst.
DYOR
$BTC
#CPITestsDecemberRateOutlook
