The latest US inflation report for March, due on Friday, is seen by many observers as a vital indicator against the background of the Iran war and its inflationary impact.
Yet recent activity in bitcoin the market shows that traders do not see it as a big market move.
“The bitcoin market is currently pricing in just a 2.5% swing in either direction on the back of the inflation data,” Markus Thielen, founder of 10x Research, told CoinDesk in an email. These probabilities are derived from options and derivatives prices, which reflect traders’ expectations of how much Bitcoin could move over a given time frame.
A 2.5% swing is well within bitcoin’s recent average volatility, indicating that the market is not expecting any major directional movement from the inflation data.
The calm in the market is also evident in the broadly tracked 30-day implied volatility, represented by the BVIV index, which has fallen to 46.5%, the lowest since January 31, according to data source TradingView.
This equates to an expected daily move of around 2.9%, which is well below the 30-day average of 3.4%. Implied volatility is determined by demand for options or hedging bets and represents traders’ expectations of price fluctuations over a specific period.
The data clearly shows that traders are largely treating Friday’s Consumer Price Index (CPI) release as a non-event. That’s somewhat ominous, given that the data is likely to offer a glimpse of the inflationary impact of the Iran war that began in late February.
“While the US price figures for March are unlikely to reflect the full extent of the situation, they provide an initial indication of how strongly the Middle East conflict could be felt in US prices,” Commerzbank said.
It is worth noting that fixed income markets have largely muted expectations of Fed rate cuts this year as the Iran war and the resulting energy price shock have increased inflation risks.
CPI provisional Friday
The CPI data, scheduled for release on Friday at 8:30 a.m. ET, is expected to show the cost of living rose 3.4% year-over-year in March, up sharply from February’s 2.4% reading, according to data source MarketWatch. The core figure, which excludes the volatile food and energy component, is expected to have increased by 2.7% after March’s increase of 2.5%.
The expected strong recovery is largely due to fuel and energy price increases triggered by the Iran war and the rise in oil prices. US gasoline prices rose in March 2026, surpassing $4 per gallon. gallon nationally for the first time since August 2022.
Several experts believe that macro conditions, especially inflation data, are the dominant market drivers.
“With the energy shock still feeding through to prices, any inflationary pressure carries asymmetric weight for crypto — a softer reading reopens the rate-cut conversation; a warmer one further hardens the higher-for-longer narrative,” Iliya Kalchev, an analyst at Nexo, said in an email. Nexo is a digital asset manager with $8 billion in assets under management.
Timothy Misir, head of research, BRN, said the next leg in bitcoin depends on Friday’s inflation data and the Fed meeting to be held on 28-29. April.
“The two events will tell the market whether policymakers still believe inflation can be contained after the oil shock, or whether the war will prolong the no-cuts regime,” Misir said in an email.
Long story short: There is a wide gap between expert expectations and how traders are pricing in Friday’s inflation data. Whether the markets are right to shrug, or whether the data proves decisive, Friday will finally show which side is right.
