The cryptocurrency market took an immediate hit on Wednesday following the release of official U.S. Consumer Price Index (CPI) data for September by the Bureau of Labor Statistics (BLS). The report revealed that the annual inflation rate rose to 3.7%—surpassing the market consensus of 3.6%—while the monthly increase stood at 0.6%. These figures, which came in hotter than expected, reinforced concerns that domestic inflation remains difficult to tame.
Pressure on risk assets intensified as the Core CPI metric—which excludes food and energy components—also exceeded initial forecasts. Core inflation rose by 2.6% year-on-year and 0.3% month-on-month, surpassing Wall Street projections of 2.5% and 0.2%, respectively. These increases demonstrate that the costs of services and essential goods continue to absorb the impact of ongoing supply chain pressures.
Bitcoin (BTC), the world's largest cryptocurrency, reacted with a rapid decline immediately after the data was released. Its price plunged by $1,000 within the first few minutes, dropping from the $83,800 level to around $82,100. This panic-driven reaction reflects the sensitivity of speculative asset investors to any surprises in key U.S. inflation indicators.
Lacie Zhang, a Research Analyst at Bitget Wallet, warned that this higher-than-expected CPI data risks triggering an aggressive repricing phase across capital markets. According to him, the market may be underestimating the risk of core inflation—driven by fuel cost spillovers linked to the war and the threat of tariffs—which could force the Federal Reserve (The Fed) to maintain high interest rates for longer than the single hike anticipated at year-end.
Regarding the short-term technical trajectory, Zhang identifies Bitcoin's next critical support zone as the $81,000 to $82,000 range. Should the sell-off intensify due to increasingly aggressive Fed monetary policy projections, Bitcoin faces a high risk of retesting that support level in the near term.
