The U.S. Bureau of Labor Statistics is set to release the consumer price index (CPI) data for September today. The expected annual inflation rate in the U.S. stands at 3.6%, showing a slight 0.1% decrease from the previous month. After a dip to 3% in June, CPI inflation has seen a two-month increase. The continuous rise in the headline CPI for the third month in a row has raised concerns for both stock and cryptocurrency markets, causing a delay in Bitcoin's upward momentum.

In the meantime, core inflation, which excludes the volatile food and energy sectors, has also decelerated from 4.3% to 4.1%. This CPI release is pivotal data that will influence whether the U.S. Federal Reserve chooses to further tighten monetary policy or take a pause. Last month, the Fed maintained unchanged interest rates to assess the impact of recent rate hikes aimed at curbing inflation.

JPMorgan predicts a high likelihood of CPI coming in at 3.6%. Analysts anticipate this could lead to a modest upswing in the markets. On Wednesday, both PPI and Core PPI inflation surpassed expectations.

Goldman Sachs, Bloomberg, Morgan Stanley, Barclays, Nomura, Citi, HSBC, and Wells Fargo also anticipate CPI to be at 3.6%. On the other hand, National Bank and CIBC predict CPI at 3.7%. However, RBC foresees a further decline in CPI to 3.5% for September.

In recent days, several Federal Reserve officials have suggested that the central bank might not raise its benchmark interest rate beyond its current 22-year high. However, Fed officials adopted a more hawkish tone following the International Monetary Fund (IMF)'s warning of inflation and reduced economic growth in 2024.

Simultaneously, the U.S. dollar index (DXY) has dropped to 105.54, offering support for a potential rebound in BTC prices towards an upward trajectory. Traders, however, remain cautious due to market uncertainties, leading many to stay away from trading. Conversely, institutional investors have started entering the cryptocurrency market over the past week.

Bitcoin and Altcoins Experience a Correction

A CPI report that surpasses expectations is seen as unfavorable for cryptocurrencies, while a lower-than-expected reading is considered bullish. It's important to consider core CPI data for the month, especially given the rise in oil prices due to the Israel-Hamas conflict.

The BTC price is displaying volatility ahead of the CPI data release, currently down 2% at $26,746, with a 24-hour range between $26,561 and $27,323.

Meanwhile, the ETH price has dropped by over 2% in the last 24 hours and is currently trading at $1,545, with a 24-hour high of $1,538. Trading volume has also decreased over the past 24 hours.

XRP's price has fallen below its support level and is currently trading at $0.48, down 2% in the last 24 hours.

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