by Coinstrooper Crypto Articles
Quick Take
  • The 3.5% pullback has left traders uneasy, with many watching the upcoming U.S.
  • Consumer Price Index (CPI) data for cues on market direction.
  • government shutdown, is now scheduled for October 24.
  • Bitcoin’s recent price action mirrors a recurring pattern.

What Happened

Consensus expectations sit at 3.1%, but after six consecutive months of rising inflation readings, investors fear another upside surprise could unsettle risk markets.

After the September 2024 cut, Bitcoin rose 6.6% in a week to around $64,300, signaling investors’ welcome of the Fed’s policy pivot.

Market Context

The 3.5% pullback has left traders uneasy, with many watching the upcoming U.S. Consumer Price Index (CPI) data for cues on market direction.

Bitcoin’s recent price action mirrors a recurring pattern.

These reactions suggest that monetary easing still carries strong upside implications for crypto markets, a trend that could reemerge if inflation data softens and the Fed maintains dovish guidance.

With gold marking a potential top and risk sentiment subdued, traders are now watching for signs of liquidity rotation back into crypto.

The precious metal extended two-day losses to -8%, erasing over $2.5 trillion in market cap, on track for its largest two-day drop since 2013.

Bitcoin bull market fractals show that gold topped in October 2020, and Bitcoin exploded right after.

According to asset manager Bitwise, only 3-4% capital rotation from gold to Bitcoin could push BTC to over $240,000 from current levels.

NVT Golden Cross Says Bull Market Not Over

Similarly, since the massive liquidation event on October 10, the crypto market has experienced a real shockwave.

Data from CryptoQuant shows that since January 2025, daily BTC spot volumes on Binance ranged between $3 billion and $5 billion.

However, since October 10, volumes have surged, now up between $5 billion and $10 billion per day.

Why It Matters

Historical Pattern Shows Inflation Data Could Trigger a Crypto Comeback

This has fueled skepticism that another rally ahead of the data could face swift rejection.

However, the setup looks different this time. Bitcoin is entering the CPI week already down over 3.5% in the past seven days, which could make it more sensitive to Fed rate cut relief rallies if inflation surprises to the downside.

Gold’s -8% Drop Could Fuel Bitcoin Rotation

Details

Bitcoin’s (BTC) short-term momentum took another hit on Wednesday after it reversed all of Monday’s pump, dropping from a high of $114,000 back to the $107,000–$108,000 support zone.

The CPI report, originally delayed by the U.S. government shutdown, is now scheduled for October 24.

The last three CPI releases have all coincided with local tops, each following a burst of bullish sentiment.

CryptoNews research examined the last four Fed rate cuts and found that each sparked short-term rallies in digital assets.

The November 2024 cut triggered a much stronger move, with BTC up 16% in a week and 32% over the month.

By December 2024, the momentum cooled as Bitcoin briefly topped $108,000 before retreating below $100,000.

While many crypto bears are calling for the top and the end of the bull run, the Bitcoin NVT Golden Cross indicator, which measures whether Bitcoin is overvalued or undervalued relative to on-chain network activity, shows that the top is not yet in.