Inflation Data Drop: Why Crypto Volatility is Heating Up

The crypto market is finally set to receive a key piece of economic data with the release of September’s Consumer Price Index (CPI), following a prolonged U.S. government shutdown. This inflation figure, due for release at 12:30 UTC on Friday, could inject some volatility into the market, with ether (ETH) potentially seeing larger price swings than bitcoin (BTC).

Inflation Expectations and Fed Action

Economists surveyed by FactSet anticipate that the overall cost of living rose 3.1% year-over-year in September, up from 2.9% in August, which would mark an 18-month high.¹ On a monthly basis, inflation is expected to have risen 0.4%. Core inflation (excluding food and energy) is also forecast to have increased by 3.1% annually, matching the previous two months.

Despite the inflation figures, the general consensus is that the data is unlikely to deter the Federal Reserve (Fed) from its expected course of cutting the benchmark interest rate by another quarter-point next week.

• Hotter-than-expected CPI could lend support to the U.S. dollar, potentially arresting gains in the crypto market, according to analysts at ING.
• Lower CPI could trigger a risk-on reaction in markets, potentially stoking bullish sentiment amid an ongoing retail selloff, notes digital asset trading firm Zerocap.

Ether and Other Alts Poised for Larger Swings

Analysis of the options market suggests that while volatility is expected for both major tokens, ether is priced for a significantly larger move than bitcoin.

• Ether is projected to move by $\pm 2.9\%$ following the CPI release.
• Bitcoin is projected to move by a smaller $\pm 1.4\%$.

This outperformance in expected volatility is consistent across other assets as well:

• XRP has an implied price move of approximately $4.7\%$.
• Solana has an implied price move of approximately $4\%$.

Volatility Is Normal, But a BTC Bounce Could Be Brewing

These projected market moves are considered nothing out of the ordinary and reflect potential volatility in either direction, without implying a bullish or bearish outlook.

However, a technical analysis by 10x Research founder Markus Thielen suggests a potential for a price bounce in BTC. He noted that the daily Stochastic indicator is showing signs of bullish divergence, hinting that downside momentum may be easing and could pave the way for a short-term recovery in bitcoin prices.

October 2025, Cryptoniteuae