Cryptos Could Rally on Softer Inflation Data
A softer-than-expected inflation report could push the 10-year Treasury yield lower, offering potential support for cryptocurrencies.
The Fed’s preferred gauge, core PCE, is expected to have risen 2.9% year-on-year in September, exceeding the Fed’s 2% target for the 55th consecutive month, according to FactSet. Persistent inflation may strengthen hawkish Fed voices who favor slower rate cuts.
Despite the inflation outlook, market volatility remains muted. Bitcoin’s one-day implied volatility index (BVIV) sits near 36%, implying a 24-hour price swing of about 1.88%, according to TradingView. Investors remain confident the Fed will proceed with a 25 basis point rate cut on Dec. 10, as priced in by CME’s FedWatch tool.
A softer report could drive the 10-year Treasury yield below 4%, potentially allowing Bitcoin to break out of its $92,000–$94,000 range. “Contained inflation would reinforce crypto’s rebound narrative, while any upside surprise may keep markets range-bound until the Fed signals its next move,” said Iliya Kalchev, Nexo Dispatch analyst.
Altcoins may see similar effects. Ether suggests a 24-hour move of 3%, Solana (SOL) 3.86%, and XRP 4.3%, slightly higher than Bitcoin’s expected swings.
