Bitcoin Price Falls Below $82,000 as High Oil Prices Push Up U.S. CPI Inflation

Bitcoin Drops Below $82,000 as Hot U.S. CPI Inflation Sends Bond Yields to Highest Levels in 24 Years

Bitcoin fell below $82,000 as bond yields hit new 24-year highs on hot US CPI inflation.

Bitcoin (BTC) fell below $82,000 after opening on Wall Street on Wednesday as US consumer inflation beat expectations.

TradingView data shows that cryptocurrency, gold and stock market futures fell after the release of the Consumer Price Index (CPI) in September.

BTC/USD hourly chart. Source: Cointelegraph/TradingView

Data from the Bureau of Labor Statistics (BLS) confirmed that the figure was 0.1 percent higher than the market consensus when compared to the same period last year. The increase in fuel prices was evident around the conflict in the Middle East and the oil supply crisis.

"The gasoline index rose 9.1 percent in September, accounting for more than half of the monthly increase for all items. The energy index rose 5.2 percent during the month after rising 2.1 percent in August," the official statement said.

Inflation rose across the board, however, as core CPI - the index minus energy and food - also came in 0.1% higher than the 2.6% year-on-year forecast.

Sonu Varghese, chief macro strategist at the Carson Group, said the high numbers should be a foregone conclusion.

"The only surprise is that investors continue to be surprised by broad inflation. And we're yet to see the full impact of higher gas prices and the AI boom," he told CNBC.

The latest data from the CME Group's FedWatch tool showed that markets were adjusting expectations for the Federal Reserve's policy as a result of the data. A majority now favored a 25-basis rate hike at the Fed's upcoming meeting on October 28, with a probability of 53.7% versus 22.1% the previous day. Meanwhile, for December, the probability of a second 25-point increase was 50 percent.

Federal Reserve target rate probabilities for the October FOMC meeting (show). Source: CME Group

"Combined with the soft payroll numbers in the September jobs report, the FOMC is likely on hold for any rate changes at its upcoming Oct. 27-28 meeting, albeit with a definite bias toward a December hike," said Theresa Sheehan, economic analyst at Econoday.

As Cointelegraph reported, the next key US inflation data release, the September edition of the producer price index (PPI), is due on Friday.

While U.S. bond yields rose, they fell to $4,079 an ounce after the consumer price index results.

The 10-year yield, highly sensitive to energy price triggers, hit 5.329%, about three basis points from new 24-year highs.

"This is the last thing global bond markets needed. Before this number, it looked like the global bond selloff was going to calm down, but now bond markets are on fire again," economist Robin Brooks wrote in a blog post.

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

Bitcoin price action continues to hover around a key zone between $82,500 and $83,400 and analysis is still waiting for the market to decide on its status as support.