Bitcoin experienced renewed selling pressure in the past 24 hours after higher-than-expected US inflation data unsettled global markets. The cryptocurrency lost more than 1% shortly following the release of the latest Consumer Price Index (CPI) report, as investors reassessed the outlook for interest rates and risk assets.
US inflation spikes, shakes financial markets
Headline annual inflation in the US rose to 3.7%, up from 3.4%, while consumer prices climbed by 0.6% on a monthly basis. The sharpest increase came from gasoline prices, which surged 9.1% during the month and accounted for much of the overall gain.
Core inflation, which excludes volatile food and energy components, registered 2.6% year-over-year. The persistence of elevated inflation increased concerns that the Federal Reserve may have less room to loosen monetary policy in the coming months.
Bitcoin’s immediate reaction to the CPI data reflected the heightened macroeconomic pressures, adding strain to an already fragile technical backdrop.
Rising consumer prices and a jump in gasoline costs have stirred unease in financial markets, forcing traders to rethink the odds of further Federal Reserve tightening and dimming hopes for early rate cuts.
Fed policy outlook shifts, dollar and Treasury yields firm
The hotter-than-expected inflation prompted a notable shift in expectations for upcoming Federal Reserve moves. Data from CME’s FedWatch tool indicates that the probability of a 25-basis-point rate hike at the October 28 Federal Open Market Committee meeting rose above 50%, up sharply from about 20% earlier in the week.
Prospects for rate cuts before year-end also diminished, leaving investors uncertain about whether the central bank will pause or proceed with additional tightening. Meanwhile, US 10-year Treasury yields strengthened alongside the US Dollar Index, making interest-bearing assets more attractive and tempering demand for riskier assets like cryptocurrencies.
These developments created a more challenging environment for Bitcoin bulls hoping for a sustained recovery.
Mini dictionary: CME FedWatch tool, a market-based indicator that tracks the probability of future US Federal Reserve rate decisions based on pricing in interest rate futures contracts.
| Event | Previous (%) | Current (%) |
|---|---|---|
| Annual US inflation | 3.4 | 3.7 |
| Probability of October Fed rate hike | 20 | 50+ |
| Gasoline price monthly change | — | 9.1 |
Technical signals point to further downside risk
Technical charts added to the negative outlook. On the four-hour BTC/USDT perpetual chart, Bitcoin completed a bear flag pattern—a bearish continuation structure that commonly signals further declines after a preceding drop.
Price action saw Bitcoin fall from approximately $86,000 to $81,000, then consolidate in a narrow upward-sloping channel. The cryptocurrency has now broken below the channel’s lower boundary near $82,371 and is trading beneath its 20-period and 50-period exponential moving averages (EMAs), currently at $83,196 and $83,384 respectively. These averages now act as resistance for short-term buyers.
Repeated failures to overcome this resistance zone suggest bear momentum remains in control, with sellers recently breaking below support at the four-hour 200-period EMA around $82,046. This exposes Bitcoin to the psychologically important $80,000 level if downside continues.
Momentum indicators confirmed this weakness, with the 14-period Relative Strength Index at 43 and pointing lower, signaling lackluster momentum but not being technically oversold.
Applying the measured-move method for the bear flag, Bitcoin may slide toward a downside target near $78,218 unless sentiment shifts. Support for buyers would require regaining the $83,196–$83,384 area to negate immediate bearish risks.
A recovery above $83,400, and especially a move past $84,000, would weaken the prevailing bear flag setup and potentially restore short-term bullish momentum toward $86,000.
Until these resistance levels are reclaimed, Bitcoin remains vulnerable to renewed declines if inflation concerns persist and traditional markets continue to react negatively. The broader macroeconomic environment and bearish technical structure continue to pose challenges for the world’s leading cryptocurrency.
