After a major five-week run that took its price nearly 40% higher, bitcoin (BTC) has stalled for the past several days around the $37,000 area. To the extent that enthusiasm around possible approval of a spot bitcoin ETF has run out of some fuel, bulls might be looking to Tuesday's Consumer Price Index (CPI) as a fresh catalyst higher.
Economists expect monthly headline CPI in October to have slowed to 0.1% from 0.4% in September. Year-over-year CPI is anticipated to have fallen to 3.3% from 3.7%. The core CPI, which strips out food and energy costs, is expected to have remained flat from September – 0.3% monthly and 4.1% year-over-year.
Both gauges remain well above the U.S. Federal Reserve's 2% target. While the central bank has indicated that inflation doesn't need to fall all the way to 2% as a requisite for ending rate hikes and considering rate cuts, speakers have made clear they want to see continued progress toward that target.
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To the extent that higher interest rates compete with risk assets for investor dollars, the idea of a lower rate regime might provide a boon to bitcoin. The opposite – of course – also holds, and should tomorrow's inflation report come in faster than anticipated, crypto prices are likely to give back more of their October advance.