Bitcoin dips below $83k after hot U.S. inflation data

Bitcoin edged lower on Wednesday, falling below the $83,000 level as traders reacted to hotter-than-expected U.S. inflation data. 

The world’s largest crypto fell 0.6% to $82,813.4 by 09:53 ET (13:53 GMT). 

Broader crypto prices clocked slightly bigger losses, extending their weak start to October as a mix of profit-taking and risk aversion weighed on the sector. 

Caution over rising oil prices also weighed on crypto markets, amid continued military tensions in the Middle East. 

Bitcoin encouraged by pickup in ETF inflows

Losses in Bitcoin were in part limited by a recovery in capital flows to spot exchange-traded funds tracking the crypto. 

Capital inflows hit $175.6 million on Tuesday, data from SoSoValue showed, their highest level in nearly two weeks. The print pointed to some recovery in capital flows after a sharp, $681 million drawdown last week. 

Still, more capital inflows are likely to be dictated by upcoming U.S. economic data and bets on more interest rate hikes. 

Capital inflows in spot Bitcoin ETFs rose sharply in the third quarter, but lost steam in the first week of October. 

Crypto price today: altcoins slide on hot CPI print

Broader crypto prices also lower on Wednesday after fresh U.S. inflation data topped forecasts.

World no.2 crypto Ether slipped 1.6% to $2,465.09, while XRP slid 0.6%.

Solana and Cardano shed 1.4% and 2%, respectively, BNB traded 0.6% lower. 

Memecoins Dogecoin and $TRUMP fell 1.6% and 1%, respectively. 

CPI data rose faster than expected in September, both on headline and core measures, underscoring the impact of an energy shock tied to the Iran war that could weigh on Federal Reserve rate decisions through year-end.

The consumer price index climbed 3.7% over the past 12 months, up from 3.4% in August and above forecasts of 3.6%. On a monthly basis, prices rose 0.6%, compared with 0.4% previously, in line with expectations.

core CPI, which excludes food and energy, rose 0.3% month-over-month and 2.6% annually, versus forecasts of 0.2% and 2.5%. Shelter, used vehicles, airfares, medical care and apparel all contributed to the increase.

The data is likely to draw close attention from Fed officials, particularly since the central bank’s October 27-28 meeting falls before the release of the personal consumption expenditures index, its preferred inflation gauge. The Fed raised rates a quarter point last month, its first hike since 2023, in an effort to bring inflation back toward its 2% target.

Following the report, traders raised bets on another rate increase this month. CME FedWatch now shows a 43.7% probability of a 25-basis-point hike, up from about 22% a day earlier, while the odds of the Fed holding steady fell to roughly 56% from 78%.

Sticky CPI furthers the case for more interest rate hikes by the Federal Reserve– a scenario that bodes poorly for crypto markets.