Bitcoin Price Support Ahead of US CPI Data: Three Things Bitcoin Traders Need to Know This Week

Bitcoin traders are bracing for inflation-driven volatility after Bitcoin's price held key weekly support near $82,500.

Bitcoin traders braced for inflation-driven volatility after Bitcoin price action held key weekly support around $82,500.

Bitcoin (BTC) starts the third week of October defending the $82,500 support ahead of key US inflation data.

US inflation data weighed on traders this week ahead of the Federal Open Market Committee's Oct. 28 meeting on interest rate policy.

The September edition of the Consumer Price Index (CPI) and the Producer Price Index (PPI) are released on Wednesday and Thursday, respectively.

In August, CPI was broadly in line with expectations of 3.4% from a year earlier, with markets now seeing a 3.7% increase this month due to ongoing military action in the Middle East and higher fuel prices. PPI is expected to be 0.3% month-on-month versus 0.2% in August.

The US 12-month CPI varies by category. Source: Bureau of Labor Statistics

"In the near term, lower-than-expected U.S. inflation will be the clearest short-term catalyst as it reduces the likelihood of further Fed contraction and eases pressure on real yields," he said.

CME FedWatch shows markets see just an 18.8 percent chance of a rate hike on Oct. 28 from the current range of 3.75-4.00 percent. The next meeting, in December, attracts a 70.6% chance of a Fed hike of 25 basis points to 4.00-4.25%.

Federal Reserve target rate probabilities (page photo). Source: CME Group

Federal Reserve Chairman Kevin Warsh is scheduled to speak with Kristalina Georgieva, managing director of the International Monetary Fund (IMF), at an event in Bangkok, Thailand on Friday.

U.S. Treasury yields hit a 24-year high last week, with the 10-year and 30-year yields at 5.24 percent and 5.60 percent, respectively, on Monday.

One-hour chart of US 10-year bond yields. Source: Cointelegraph/TradingView

Stock futures were green to start the week, with the S&P 500 up 0.25% and about 30 points off new all-time highs.

One-hour futures chart of the S&P 500. Source: Cointelegraph/TradingView

US President Donald Trump's announcement to buy 300,000 tons of diesel from Russia appears to have had little effect on oil prices, and the plan has been met with strong bipartisan backlash. Trump also announced an "energy ceasefire" between Russia and Ukraine.

"There is an energy truce in the war between Russia and Ukraine. Both sides have agreed," he wrote in a post on Truth Social on Sunday. Ukrainian President Volodymyr Zelensky said he was unaware of the energy ceasefire.

WTI crude traded around $91.50 a barrel on Monday, up 2 percent from the day's low of $89.60. Data from motorist group AAA showed average diesel prices at $6.26 a gallon, compared to a high of $6.52 on Sept. 22.

CFDs on the hourly chart of WTI crude oil. Source: Cointelegraph/TradingView

However, Moscow has partially lifted the ban on diesel exports, allowing 500,000 tonnes (about 3.7 million barrels) to be sold on the international market, about one day of US consumption and about 13 percent of global demand.

At around $83,700 on Bitstamp, Sunday's weekly candle close cemented a 3.2% weekly decline for BTC/USD.

BTC/USD weekly chart. Source: Cointelegraph/TradingView

At the same time, the pair maintained a key support level at $82,500 on weekly time frames, thus avoiding a return to its previous long-term range between $60,000 and $80,000. As Cointelegraph reported, $82,500 remains on traders' radar as a very important line for Bitcoin bulls.

Last week, trader and analyst Rekt Capital wrote that the weekly close above $82,500 indicated a "successful" retest of support. This, in turn, could cause investors to continue to re-accumulate Bitcoin at current levels, paving the way for Bitcoin to recover from the 2022 bear market in a similar fashion.

BTC/USD weekly chart. Source: Rekt Capital at

Given Bitcoin's multiple retests after its initial breakout in July, trader and analyst Aksel Kibar drew comparisons between the cryptocurrency and stock markets. Since May, the S&P 500 has seen key levels several times, first at 7,300 and then at 7,600.

One-day chart of the S&P 500. Source: Cointelegraph/TradingView

Bitcoin may similarly experience a "hard retest" of support, with the implication that if these retests are successful, Bitcoin/USD should move higher, Kibar wrote in Post X on Sunday.