Crypto traders have had a hard time figuring out the market in the last 24 hours like bitcoins the price fluctuated wildly between $86,000 and $90,000.
Things could get more exciting later Thursday with key US inflation figures for November coming up. This will provide a fresh look at price pressures in the economy after the record government shutdown canceled the October data and left the Federal Reserve in the dark.
What the data can show
The data is expected to show that the headline consumer price index (CPI) rose to 3.1% year-on-year in November, up from October’s 3%, according to FactSet consensus estimates. Core inflation, which excludes volatile food and energy prices, is expected to be 3.1%.
That’s still a full point above the Fed’s 2% target, which could encourage Fed hawks to downplay expectations of rate cuts. At the time of writing, the markets expect at least two rate cuts of 25 basis points next year.
Expert opinion
“This release is highly anticipated, largely because recent government shutdown-related data disruptions left the Federal Reserve (and the broader market) partially blindsided. With the October report canceled, this is the first comprehensive look at price developments in weeks,” said Dr. Mohamed A. El-Erian is President of Queens’ College of the All Economic Fund at Cambridge University and part-time Director of Graimercy Management. X.
He added that markets will be looking for two things: whether the services inflation trend has stronger legs and what remains of the tariff-driven price flows in good inflation.
Why Bitcoin May Respond
If the data confirms a fall in inflation, it could lead markets to price in further rate cuts for 2026, which would stimulate risk-taking in financial markets. However, note that BTC did not show a sustained bullish reaction to the jobs data released on Tuesday, which showed the unemployment rate at its highest since September 2021.
Also, the 10-year Treasury yield has remained stuck above 4% in recent months despite easing by the Fed. This is partly due to uncertainty about inflation, as the CPI has steadily risen from 2.3% in May to 3% in October.
Longer duration rates like the 10-year incorporate investor bets on inflation trends, economic growth and the Fed’s policy paths. Higher interest rates signal stronger expectations in these areas and increase the attractiveness of fixed income instruments, which inhibits the attraction of risk assets.
Against this background, a warmer than expected inflation report could push interest rates up further, complicating matters for BTC bulls.
Crypto Challenges
Note that crypto-specific factors don’t help either. For example, MSCI’s government bond review of digital assets provides a major headwind.
“MSCI is reviewing the index eligibility of digital asset treasury companies, with potential exclusions for firms that have more than 50% exposure to crypto. If passed, passive outflows could reach USD 2.8 billion, adding pressure to an already fragile market,” said the market insights team at Singapore-based QCP Capital.
