Bitcoin faces U.S. CPI test as analysts warn inflation relief may not be enough

Bitcoin (BTC) traded weak early Tuesday as analysts braced for October inflation data that could determine whether risk assets get a year-end tailwind or face another wave of selling.

The leading cryptocurrency by market value changed hands at around $74,750 at press time, down 0.6% since midnight UTC hours. Prices briefly topped $75,000 during the overnight trade.

The consumer price index (CPI), due at 8:30 a.m. ET, is forecast to rise 0.3% on the month, while core inflation, which strips out volatile food and energy costs, is expected to increase 0.2%, according to Dow Jones consensus estimates. Both would mark a slowdown from September’s 0.6% and 0.3% gains, respectively.

There will be no year-over-year comparison for October. A government shutdown in October last year prevented the Bureau of Labor Statistics from compiling a full index level, leaving no comparable annual figure.

A market waiting for relief

For bitcoin, the report arrives at a fragile moment. The cryptocurrency has been in a mini-downtrend since peaking above $87,000 in early October, as AI-related jitters weighed on Wall Street.

Spot bitcoin ETFs, the demand source many bulls had counted on to sustain the rally into year-end, have faltered, leaving the market dependent on broader macro conditions and spot buying to regain momentum.

Analysts therefore expect a temporary relief on the back of a potential soft inflation print and look to ETFs for a sustained rally.

“Any easing in inflation expectations would help risk assets,” analysts at BRN said. “[But], Bitcoin needs real buying, not a lucky break. Until ETF flows turn positive and the Fed turns dovish, the path of least resistance remains lower.”

Analysts at Bitget Wallet voiced a similar opinion.

“This week's inflation data adds another test. Hotter readings could reinforce December rate-hike expectations, while softer core inflation could trigger a relief rally. But a durable Bitcoin recovery will depend on improving liquidity and spot demand, not macro relief alone,” they said in an email.

Note that the inflation report is the first of several data points lined up over the coming days. Producer price data is due Nov. 13, minutes from the Federal Reserve’s October meeting will be released Nov. 18, and the PCE report, the Fed’s preferred inflation gauge, follows on Nov. 25.

Moon Pursuit Capital founder and managing partner Utkarsh Ahuja said persistent inflation could limit the Federal Reserve’s ability to provide policy support, even if technology stocks weaken, and pointed to recent comments from San Francisco Fed President Mary Daly about possible further rate increases as a reason investors should not assume an imminent Fed rescue.

“For capital-intensive AI projects, higher financing costs and longer approval timelines can reduce returns even when demand meets expectations,” Ahuja said. It added that businesses needing fresh capital before existing projects generate cash face both execution risk and uncertainty over the terms of future financing.

Key levels analysts are watching

BRN said a daily (UTC) close below $73,000 could trigger momentum-driven selling toward $70,000, with a deeper move possible toward July’s lows below $60,000.

The firm characterized the recent bounce from below $74,000 as a pause in a downtrend rather than a reversal.

Bitget Wallet analysts similarly flagged the $73,000-$74,000 range as the key support zone. They said stabilization would require more balanced derivatives positioning and sustained positive ETF flows, while reclaiming and holding $80,000 would signal stronger demand.

“A decisive break below $73,000 could expose $68,000. If $68,000 also fails to hold, the selloff would suggest more than a temporary leverage flush,” they said.