Bitcoin traders await key CPI data for signs of inflation trends

Bitcoin (CRYPTO:BTC) traders are closely watching this week’s U.S. Consumer Price Index (CPI) data, which could provide crucial insights into inflation trends and influence the next price movement of the cryptocurrency. 

Analysts believe a positive print could pave the way for Bitcoin’s continued rise, following recent support for the "Uptober" narrative. 

Digital assets firm QCP Capital noted that Bitcoin has maintained support around $60,000, buoyed by strong nonfarm payroll data and the general market trend in October. 

"After a shaky start, Uptober seems to be back on track,” QCP wrote, adding that Bitcoin has returned to similar levels seen earlier in the month. 

As of Monday, Bitcoin briefly reached $64,000 before dipping 2% to $62,570, while Ethereum fell 3% to $2,432, according to CoinGecko data. 

The CPI is projected to increase by just 0.1% in September, marking the smallest rise in three months. 

Year-over-year, the index is expected to rise 2.3%, the lowest level since early 2021, reflecting the sixth consecutive slowdown. 

QCP highlighted that "all eyes are on US CPI," as investors are keen to see if inflation is cooling, especially in light of recent strong wage and jobs data. 

Inflation trends, as measured by the CPI, help guide the Federal Reserve’s decisions on interest rates. 

If the CPI shows a rise, it may lead to higher interest rates, which could pressure risk assets like Bitcoin. 

On the other hand, lower inflation could create room for rate cuts, benefiting speculative investments like cryptocurrencies. 

Blockchain expert Anndy Lian noted that Bitcoin has historically been volatile in response to CPI data. 

He added that positive CPI results often boost Bitcoin prices, while higher-than-expected inflation might signal stricter monetary policies, potentially affecting Bitcoin negatively. 

At the time of writing, the Bitcoin price was $62,634.92.