Softer inflation gives bitcoin room to run, but downside risks lurk beneath: analysts

Bitcoin prices rose after the U.S. Consumer Price Index (CPI) showed a year-over-year increase of 3.0%, slightly below the 3.1% estimate, easing policy uncertainty. Analysts like Nic Puckrin of The Coin Bureau viewed this as the most impactful inflation report of the year, potentially setting the stage for the FOMC to continue its rate-cutting cycle, which risk assets have awaited. Puckrin suggested a sustained move above $116,500 could lead to a new Bitcoin record, especially if capital rotates from gold into crypto over the weekend.

However, experts also urged caution due to lingering structural risks. Timothy Misir of BRN noted that elevated options open interest leaves dealers vulnerable to rapid, outsized moves around liquidation clusters, notably near $114,000. Furthermore, long-term holder selling continues to counterbalance ETF demand. Analysts see two paths: a bullish scenario driven by ETF demand and retail rotation, or a risk scenario involving ETF outflows or macro shocks causing sharp losses.

Adding to macro uncertainty, the ongoing government shutdown might prevent the October CPI report from being released next month, which Puckrin warned could dampen sentiment and delay legislative progress, including altcoin ETF approvals.

(Source：The Block)