The price paid by consumers for a diverse variety of goods, utilities, and services increased at a slightly faster pace than expected in September, keeping inflation under the radar for policymakers.
The consumer price index, which is a meticulously and carefully watched inflation gauge, increased 0.4% on the month and 3.7% from the previous year, according to a Labor Department report on Thursday in comparison with respective Dow Jones estimations of 0.3% and 3.6%, respectively.
Excluding volatile food and energy prices, the so-called ‘core CPI’ increased 0.3% on the month and 4.1% on a 12-month basis, both exactly in line with expectations. Policymakers place more emphasis on the core numbers as they tend to be reliable predictors of long-term trends.
Impact on Crypto Market
The US FOMC has been affecting the crypto markets for a while. The market appears to be hesitant whenever the minutes are released or when fresh CPI data is presented. The markets are likely undergoing a minor pullback leading up to the data release; and further experiencing a short but strong upswing.
Recently, the FOMC’s minutes were released, per which the officials believe rates continue to be reactive, which indicates that they could leisure the economy or combat inflation. CPI data is about to be released, naturally, high volatility is expected to prevail within the space temporarily. The impact has already been witnessed, with BTC showing a minor pullback.
The week witnessed an excruciating sell-off, and if, surprisingly, the CPI data is favorable (a lower than expected rate), then several shorts would possibly start covering, causing a squeeze. If the opposite is the case (high inflation rate), a fresh bullish case may emerge. After that, the shorts may gain profit again, which would be a temporary relief; else, the trend could resume the same way after the bullish and bearish activity ceases if the data is according to the estimates.
Expectations From Bitcoin & the Crypto Market
Bitcoin ended the previous day’s trade on a bearish note. BTC price has not recorded any specific movement on either side, as the H4/D1 structure remains constant. Perhaps, a smattering momentum shift is witnessed within the AO and RSI while the token is battering the oversold zone, which causes some LTF divergence. moreover, some observations were made that support in further analysis:
- Longs made their presence but not more significant
- OI is creating newer highs while the price is constant in the range
- The Funding rate plunged soon after the latest reduction, which then spiked briskly, indicating the optimistic and active status of bulls.
- The cumulative volume data (CVD) is an indicator of volume, was leading after the drop, which is considered healthy for the bulls
With the CPI data on the horizon, Bitcoin (BTC) price is in a situation wherein it would be supported with a strong support base, notching a local bottom to continue the bullish trajectory. Therefore, the next interim is targeted approximately at $29,000. If the bears’ presence emboldens, bullish momentum could prevail until it doesn’t cap above $26,000.
Source: https://www.thecoinrepublic.com/2023/10/12/think-tanks-on-todays-cpi-data-and-its-impact-on-the-crypto-market/