Bitcoin Dips Below $83K Following CPI Data

Bitcoin Slides on Inflation Concerns

Bitcoin’s price experienced a pullback Wednesday, trading around $82,827 after briefly falling to $82,331, following the release of U.S. inflation data. The dip represents a nearly 1% decline over the past 24 hours and reverses some of the gains seen in August and September, which had prompted some analysts to suggest the end of the bear market.

The Labor Department’s Bureau of Labor Statistics reported that the Consumer Price Index (CPI) increased by 0.6% in September, accelerating from the 0.4% rise in August. Year-over-year, the CPI climbed 3.7%—up from 3.4% in August—indicating persistent inflationary pressure.

The Federal Reserve’s response to these figures is key. The central bank has signaled it may maintain higher interest rates for a longer period to combat inflation. Bitcoin, like other risk assets, often reacts negatively to anticipated rate hikes due to the resulting reduction in market liquidity. However, it’s worth noting that BTC increased in value during September despite hawkish commentary from the Fed.

Currently, fed funds futures, as tracked by CME Group’s FedWatch tool, assign a 47% probability to a rate hike at the October 28 Federal Open Market Committee meeting. Market participants will be closely watching for guidance on the Fed’s future monetary policy.

Source: Bitcoin Magazine