BTC Reverses 3.5% Pump Ahead of CPI — Will Inflation Data Trigger a Crypto Comeback?
Bitcoin’s (BTC) short-term momentum took one other hit on Wednesday after it reversed all of Monday’s pump, dropping from a high of $114,000 again to the $107,000–$108,000 assist zone.
The 3.5% pullback has left merchants uneasy, with many watching the upcoming U.S. Consumer Price Index (CPI) data for cues on market course.
The CPI report, initially delayed by the U.S. authorities shutdown, is now scheduled for October 24.
Consensus expectations sit at 3.1%, however after six consecutive months of rising inflation readings, buyers worry one other upside shock might unsettle threat markets.
Historical Pattern Shows Inflation Data Could Trigger a Crypto Comeback
Bitcoin’s latest value motion mirrors a recurring sample.
The last three CPI releases have all coincided with native tops, every following a burst of bullish sentiment.
This has fueled skepticism that one other rally forward of the information might face swift rejection.
However, the setup seems completely different this time. Bitcoin is getting into the CPI week already down over 3.5% prior to now seven days, which might make it extra delicate to Fed rate cut relief rallies if inflation surprises to the draw back.
CryptoNews research examined the final 4 Fed charge cuts and located that every sparked short-term rallies in digital property.
After the September 2024 reduce, Bitcoin rose 6.6% in a week to round $64,300, signaling buyers’ welcome of the Fed’s coverage pivot.
The November 2024 reduce triggered a a lot stronger transfer, with BTC up 16% in a week and 32% over the month.
By December 2024, the momentum cooled as Bitcoin briefly topped $108,000 earlier than retreating under $100,000.
These reactions recommend that financial easing nonetheless carries sturdy upside implications for crypto markets, a development that might reemerge if inflation information softens and the Fed maintains dovish steerage.
Gold’s -8% Drop Could Fuel Bitcoin Rotation
With gold marking a potential prime and threat sentiment subdued, merchants at the moment are looking ahead to indicators of liquidity rotation again into crypto.
The valuable steel prolonged two-day losses to -8%, erasing over $2.5 trillion in market cap, on observe for its largest two-day drop since 2013.
Bitcoin bull market fractals present that gold topped in October 2020, and Bitcoin exploded proper after.
According to asset manager Bitwise, solely 3-4% capital rotation from gold to Bitcoin might push BTC to over $240,000 from present ranges.
NVT Golden Cross Says Bull Market Not Over
While many crypto bears are calling for the highest and the tip of the bull run, the Bitcoin NVT Golden Cross indicator, which measures whether or not Bitcoin is overvalued or undervalued relative to on-chain community exercise, reveals that the highest isn’t but in.
Similarly, for the reason that large liquidation occasion on October 10, the crypto market has skilled a actual shockwave.
Data from CryptoQuant reveals that since January 2025, every day BTC spot volumes on Binance ranged between $3 billion and $5 billion.
However, since October 10, volumes have surged, now up between $5 billion and $10 billion per day.
This acceleration reveals a renewed curiosity in spot buying and selling that might lay the groundwork for a extra sustainable bullish restoration.
Technical Analysis: Bitcoin Support Holds at $108K-$112K Zone
On the technical entrance, Bitcoin’s 3-hour chart reveals that the asset has since entered a correction part, breaking under the 0.5 Fibonacci stage and at the moment testing assist close to the 0.25 stage round $112,000.
The latest value motion reveals elevated volatility with sharp strikes in each instructions, indicating indecision out there.
The projected trajectory suggests Bitcoin is looking for assist within the $110,000-$112,000 zone earlier than doubtlessly rebounding towards $117,000.
If Bitcoin can maintain above $108,000 and kind a base, the trail of least resistance seems to focus on the $117,000 stage first, with potential to retest the earlier highs close to $126,000 if bullish momentum returns.
However, a breakdown under $106,000 would invalidate this bullish situation and will set off additional draw back strain.
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