Inflation Data Disappoints Bitcoin Bulls

Investing.com – The US Consumer Price Index inflation data released today showed that inflation didn’t slow down as much as expected in September, which apparently disappointed Bitcoin bulls.

The just-released report showed that overall inflation stood at 2.4% year-over-year, a slight decrease from the previous 2.5%, but still higher than the 2.3% forecasted by economists. Meanwhile, the "core" inflation measure, which excludes the more volatile food and fuel costs, edged up to 3.3%.

After hitting $61,246 in the European session, the primary coin was down about 0.2%. Ethereum price slipped as much as 2.4% while other cryptocurrencies were down as well, including Polkadot (-1.1%).

Higher-than-expected inflation numbers fuel speculation that the Fed will pause rate cuts, boosting the dollar's strength and prompting risk aversion in the risky markets, including cryptocurrencies.

The CME's FedWatch tool now indicates an 85% probability that the Federal Reserve will cut interest rates by 25 basis points at its November 7 meeting, up from 65% a week ago. Previously, there was a 35% chance that the Fed might make another 50 basis-point cut before the end of the year, following the initial cut in September.

Crypto prices have been highly sensitive to U.S. economic data in recent months, often reacting as investors lean towards stability instead of riskier assets.

Meanwhile, it was a quiet day for Bitcoin ETFs despite outflows of over $30.5 million on Wednesday, with nine out of the 11 funds showing no movement in either direction. A day earlier, U.S.-listed BTC ETFs saw their highest inflows since September 27, with a net addition of $235.2 million. Fidelity Wise Origin Bitcoin Fund (NYSE:FBTC) led the way, bringing in $103.7 million, while BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) followed with $97.9 million.

Bitcoin ETFs have attracted nearly $19 billion in net inflows since January. However, Ether ETFs recorded zero flows in either direction yesterday, the second time this week and the third time since their launch that these funds have seen no activity, leaving them with net outflows of $562 million since their debut in July.

Additional U.S. economic data set to be released on Thursday includes the weekly jobless claims report, real earnings figures, the monthly retail chain store sales index, and the Treasury budget statement for the month.