Expert Warns of Possible Crypto Bloodbath Ahead of U.S. CPI Data Release
The crypto market is on edge as investors brace for the U.S. Consumer Price Index (CPI) data, which is set to be released by the Bureau of Labor Statistics (BLS) on Friday despite the ongoing government shutdown. The report will play a major role in shaping the Federal Reserve’s next move, especially regarding another potential interest rate cut this month.
Economists are forecasting the monthly CPI to rise by 0.4%, matching August’s print, while annual CPI inflation is expected to tick higher to 3.1% from 2.9% last month. The core CPI, which excludes food and energy, is also projected to climb 0.3% month-over-month, maintaining an annual rate of 3.1%.
Top Wall Street institutions, including Barclays, JPMorgan, Deutsche Bank, and Goldman Sachs, are projecting headline CPI around 0.39% with several expecting the core CPI to exceed 0.4%. These elevated readings could keep inflation concerns alive and pressure the Federal Open Market Committee (FOMC) to stay cautious — potentially triggering further market volatility.
In crypto markets, analysts are warning of short-term turbulence ahead. According to 10x Research, option traders are showing signs of fear as BTC and ETH skews have turned sharply bearish. Bitcoin’s implied volatility remains above realized levels, while Ethereum options have become relatively cheap — prompting some traders to short $BTC while buying longer-term $ETH calls.
On-chain data from Glassnode shows rising stress among short-term holders, with capitulation signals flashing. Analyst Ali Martinez also noted that when Bitcoin breaks below the short-term holder (STH) realized price, it often dips toward the long-term holder (LTH) realized price — currently around $37,000.
With inflation data looming and traders bracing for impact, the next 24 hours could be critical for the crypto market’s direction.
