Economic Data in Focus: How September US CPI Shakes Bitcoin

As the Federal Reserve’s decision approaches, the entire crypto market is holding its breath, awaiting a key economic data release. The September US CPI announcement has become the market’s focal point, not only because it reflects inflation trends but also because it will directly influence the Fed’s policy direction. During the government shutdown, this Consumer Price Index report has become the “only window” to assess economic conditions.

Analysts point out that the timing of this data release is particularly significant. Since the US Department of Labor has suspended the release of other important economic indicators such as employment and producer prices, relying solely on CPI to gauge inflationary pressure greatly amplifies the report’s market impact. The status of this “exclusive data” means that every percentage point change could trigger intense market volatility.

Federal Reserve Policy Signals: When Will Rate Cuts Materialize

According to CME futures data, market sentiment toward the Federal Reserve has largely been settled. If the September CPI meets expectations, there is a 99% probability that the Fed will proceed with rate cuts in subsequent meetings. This overwhelming market expectation reflects a core logic: as long as inflation data remains within expected ranges, easing policies will become a reality.

However, the specific number for September CPI will determine the extent of easing. August’s inflation rate was 2.9%, and the market expects a slight increase to 3.1% in September, still within manageable levels. The performance of core CPI (excluding food and energy) is especially critical—if its quarterly increase remains below 0.3%, it will reinforce the narrative of “inflation easing,” thereby boosting rate cut expectations and weakening the dollar. Conversely, if the data shows persistent inflation—particularly if service and housing prices increase by more than 0.4%—it could reignite discussions of rate hikes, strengthening the dollar.

Multiple Scenarios for Bitcoin: Price Movements Depend on CPI

The crypto market’s reaction to the September US CPI follows a relatively clear logical chain. When inflation data is below expectations, the market will reassess the Fed’s easing capacity, putting pressure on the dollar, and Bitcoin often benefits as a “risk-on” asset. Data shows that if core CPI remains moderate, it could trigger significant ETF capital inflows into the crypto market, pushing Bitcoin to higher levels.

However, if September CPI exceeds expectations, US Treasury yields and the dollar will rise simultaneously, exerting clear pressure on risk assets. Bitcoin will face downward pressure from recent highs, and market risk appetite will quickly shift toward safe-haven assets. Analysts note that such “surprises” often lead traders to reassess risk tolerance, with funds flowing out of crypto and back into safer traditional assets.

There is also a common “data phenomenon” in the crypto market: before major economic data releases, markets tend to rally in advance (traders front-run positions); but if the data is less favorable than expected, prices may quickly retrace, and volatility will spike significantly. This suggests that the release of September CPI data may trigger price adjustments more easily than market anticipates.

Core Indicators Traders Should Watch

To accurately gauge Bitcoin’s direction after the September CPI, traders need to closely monitor two real-time signals: US Treasury yields and the dollar index. The interaction of these two indicators directly determines the flow of risk assets.

If both Treasury yields and the dollar rise simultaneously, it indicates renewed expectations of rate hikes, and Bitcoin will face continued selling pressure. Conversely, if both decline together, it suggests that easing expectations are reignited, risk appetite recovers quickly, and Bitcoin could regain upward momentum. The combined change of these two indicators is more predictive of the market’s true reaction than the CPI number alone.

Analysts also emphasize that another key factor influencing future trends is the continued inflow of ETF capital. If September CPI triggers increased easing expectations and ETF inflows persist, Bitcoin could break through recent highs; on the other hand, if data disappoints and capital flows out, support levels will be tested. Volatility will remain high during this phase, and the pace of ETF capital inflows and outflows will be a critical variable in determining whether Bitcoin can sustain its rally.