Cryptos Could Gain if September Inflation Report Comes in Softer Than Expected
A softer-than-expected inflation reading could push the 10-year Treasury yield lower, providing a potential boost for cryptocurrencies.
The Fed’s preferred measure, core PCE, is expected to have risen 2.9% year-on-year in September, exceeding the Fed’s 2% target for the 55th consecutive month, according to FactSet. Persistent inflation may strengthen the position of hawkish Fed officials, who favor a slower pace of rate cuts.
Despite the inflation outlook, market volatility remains subdued. Bitcoin’s one-day implied volatility index (BVIV) is around 36%, implying a 24-hour price swing of roughly 1.88%, according to TradingView. Low volatility reflects market confidence that the Fed will proceed with its planned 25 basis point rate cut on Dec. 10, as priced in by CME’s FedWatch tool, regardless of the PCE outcome.
A softer report could drive the 10-year Treasury yield below 4%, potentially allowing Bitcoin to break out of its $92,000–$94,000 trading range. “A contained PCE reading would reinforce the easing narrative supporting crypto’s rebound, while any upside surprise may keep markets range-bound until the Fed clarifies its path,” said Iliya Kalchev, Nexo Dispatch analyst.
The report could also impact altcoins. Ether’s implied volatility is 57.23%, suggesting a 24-hour swing of about 3%. Solana (SOL) signals a 3.86% move, and XRP sits at 4.3%, indicating slightly higher expected price swings compared with Bitcoin.
About The Author
More Stories
Bitcoin rises above $87,000 while the yen weakens after Japan raises interest rates.
XRP falls alongside Bitcoin, which drops back to $85,000 after a surge.
With Bitcoin’s realized cap staying at a record $1 trillion, the four-year market cycle comes under scrutiny.