Bitcoin volatility spikes as investors await U.S. inflation data

U.S. inflation data for November, expected to show a 3.1% rise in the consumer price index (CPI), could shape Federal Reserve interest rate decisions and influence financial markets.

Crypto traders have faced volatility over the past 24 hours, with bitcoin (BTC) swinging between $86,000 and $90,000 as investors anticipate the key economic release.

Thursday’s CPI report will provide a first comprehensive look at price pressures since the October government shutdown canceled last month’s data, leaving the Fed without fresh guidance. Consensus estimates from FactSet predict headline CPI at 3.1% year-on-year, up from October’s 3%, while core inflation, excluding food and energy, is also expected at 3%.

With inflation still above the Fed’s 2% target, hawkish policymakers could temper expectations for rate cuts. Markets currently price in at least two 25-basis-point cuts in 2026.

Expert insight
“This report is particularly important because the October data cancellation left the Fed and markets partially in the dark,” said Dr. Mohamed A. El-Erian, President of Queens’ College, Cambridge University. He noted that investors will watch for signs that disinflation in services is holding and whether tariff-driven price pressures in goods are easing.

Implications for Bitcoin
If the CPI shows continued disinflation, markets may anticipate additional rate cuts next year, potentially boosting risk appetite, including crypto. However, bitcoin has not reacted strongly to recent data, such as Tuesday’s jobs report, which showed unemployment at its highest since September 2021.

Meanwhile, the 10-year U.S. Treasury yield has remained above 4%, reflecting ongoing uncertainty about inflation, growth, and Fed policy. Higher yields increase the appeal of fixed-income instruments, potentially limiting upside for risk assets like BTC. A hotter-than-expected CPI could push yields even higher, adding pressure on bitcoin.

Crypto-specific challenges
Additional headwinds include MSCI’s review of digital-asset treasury companies, which could exclude firms with over 50% crypto exposure. According to QCP Capital, passive outflows could reach $2.8 billion, adding stress to an already fragile market.