Bitcoin Price Action and US Inflation Data: A New Era for Risk Assets?
Bitcoin (BTC) experienced a surge in price on Friday, reaching $112,000, as the US inflation data sent stocks to new all-time highs. The September release of the Consumer Price Index (CPI) consistently underperformed expectations, which is a key tailwind for crypto and risk assets. According to an official release from the US Bureau of Labor Statistics (BLS), both the CPI and the core CPI were 0.1% below their expectations and were around 3%.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
The Impact of Soft US CPI Data on Bitcoin Price
The soft US CPI data has led to increased optimism about risk assets, as the Federal Reserve expects further interest rate cuts through 2026. This has resulted in a positive impact on the economy and corporate earnings, which are necessary to drive the rally next year. According to trading resource Mosaic Asset Company, “Financial conditions remain loose overall and are getting a further boost as the Federal Reserve is expected to cut interest rates at its two remaining meetings this year.”
CPI 12-month change in %. Source: BLS
Bitcoin Price Struggles Despite CPI Relief
Despite the relief from the consumer price index, Bitcoin price struggled to maintain its gains. Traders remained nervous, with X commentator Exitpump warning that there was little support below the spot price. Trader Diego White described liquidity conditions on the exchange’s order book as “severe” as data from CoinGlass showed the price approaching a new supply ladder of around $110,000.
Heatmap of BTC liquidation. Source: CoinGlass
Key Support Levels for Bitcoin Price
Caleb Franzen, creator of financial research resource Cubic Analytics, pointed to three exponential moving averages (EMAs) that are now desperate to reclaim as support. “$BTC is recovering from the 200-day EMA so far. But now it needs to break and close the 21/55 level, which acted as resistance during the retest earlier this week,” he told X Followers.
BTC/USD one-day chart with 21, 55, 200 EMAs. Source: Caleb Franzen/X
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision. For more information on Bitcoin price action and US inflation data, visit https://cointelegraph.com/news/bitcoin-spikes-112k-soft-us-cpi-data-sp-500-hits-record-high?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
