Bitcoin Before Wednesday’s CPI Inflation Data: What 91 Reports Show

[00:00:00] Speaker 1: The last time US inflation data came out on the 11th of September, Bitcoin first jumped 3% in two hours and by the end of the day, nearly all of it was gone. On Wednesday, the next report is due. So what really happens to Bitcoin on inflation day? I want to talk about what we can expect on Wednesday. The number comes out at 8.30 in the morning New York time. Forecasts from Trading Economics and the Cleveland Fed are 3.6 to 3.7%. That's up from 3.4% in August. And the Fed already raised rates in September. Yet, the options market expects Bitcoin to stay fairly calm, not far above the quietest level of the year. In Sunday's video, I called Wednesday's inflation data a possible trigger. Today, we put that to the test. We went through all 91 CPI releases since February 2019, hour by hour, with the data from our MCO terminal, our own research platform. And at the end, I'll show you what it means for the red zone on my chart. If you are new here, on this channel, you get Elliot Wave with real data, like the 91 CPI days today, and every scenario comes with the level where it's invalidated. If that is useful to you, make sure you subscribe. Now, quickly, where we are. On Thursday, 8th of October, Bitcoin dropped to about 80,300. Since then, it recovered. And on Sunday, the weekly candle closed above the May high. Right now, it's sitting in the lower part of the red resistance area between 83,000 and 86,600. So, was the 11th of September a one-off? We lined up the release dates from the Bureau of Labor Statistics with Binance's hourly candles. We always measured the same window, from half an hour before the number to an hour and a half after it. On Wednesday, that's 8 to 10 in the morning New York time. In the UK, it's 1 to 3 in the afternoon. On CPI days, Bitcoin moved 1.1% on average in those two hours in either direction. On all other weekdays, at the same time of the day, it moved 0.74%. That's 1.6 times as much. And since 2024, it's almost double. It might not sound much, but it's still significant. But the gap only shows up since 2022. From 2019 to 2021, those two hours were actually slightly calmer on CPI days than normal. Since 2022, they've been more volatile in every single year. More than 1 in 4 CPI days was as jumpy in those two hours as only one normal day in 10. And it's not chance. We drew 91 normal days at random 5,000 times. Not once did they reach the average. Now, the whole day. Here, the difference almost disappears. On CPI days, Bitcoin moved 2.57% on average. On other weekdays, it moved 2.4%. Almost 1 in 4 random samples of normal days reaches 2.57% too. And since 2024, both have been just under 2%. So those two volatile hours don't make the whole day noticeably more volatile. Now, what about the direction? I know many of you are interested in that. So Bitcoin went up in those two hours 50 times and down 41 times. That's a coin flip, basically. We didn't split the releases into hot and cool prints, though. But before the release, nobody knows which one it'll be. And the first move didn't tell you much either. Over the next 24 hours, Bitcoin kept going the same way in only 44 of 91 cases. Two caveats. The comparison days include other data that comes out at the same time. The jobs report, for example. That makes the CPI effect look smaller than it is, not bigger. And these are Binance candles only from one of the most important exchanges. So spot and futures look almost the same here. So now here's the answer. CPI clearly moves Bitcoin. It does. And it's important to understand the volatility is there. But it only moves it briefly. In the two hours around the number, it's moved almost twice as much as normal since 2024. Over the whole day, barely more than on any other day, however. Before the number was out, the direction was a coin flip. And the first move didn't predict the next 24 hours. The number is the trigger. So for me, therefore, where it goes from there comes from the chart. And right now, Bitcoin is sitting in my red decision zone. But let me put that into context. An average doesn't tell you what this Wednesday will do. One print can be the outlier. And 11th of September was one. It was up 2.86% in the window. The biggest two-hour CPI move of the year. What the average does tell you, though, is what to prepare for. Two volatile hours. Not a noticeably more volatile day overall. And therefore, I often say, guys, when it comes to CPI, don't focus too much on the two- to three-hour window around CPI. A lot of it is just noise. You get lots of algo, bot trading. It's not really market sentiment. That's important to understand. And it's just the market figuring out what it wants to do. Often nervous. And so, therefore, focus not too much on that short-term volatility. But we have two volatile hours usually. And what is about the options market then? Deribit's DVOL is basically the VIX for Bitcoin. How much movement options traders expect over the next 30 days. It's just under 38. Not far above this year's low of 33.6. A low DVOL isn't a guarantee either. And futures? Open interest. So, all open positions in the main Bitcoin futures contract on Binance is close to the low of the whole correction. Funding, what longs pay shorts, has been lower this year than in any year since our data starts in 2019. Fewer open positions can mean less gets forced closed when things move fast. But that is no protection. Now, what about the chart then? So, on my chart, the decline from the 21st of September high is three waves. So, it's clearly corrective. In blue, the 8th of October low is wave A and the bounce is wave B which has now reached the red resistance zone. Short term, this could still be a C wave up inside the B wave towards maybe 85,496. That works as long as the last low at 82,710 is holding. This is exactly where the number comes in. Whether Bitcoin gets rejected here or breaks through, we can of course only watch. I can tell you that the move to the upside from the last lows doesn't look terribly impulsive but still, there could be a C wave to the upside that's unfolding as per the blue count. Now, Wednesday's two hours can be the trigger in either direction. Since the first move on CPI days hasn't really told us much, I'll mainly watch the daily candle afterwards. So, no rush there. And important is to understand where it closes. Let's say if Bitcoin gets rejected from resistance, we're probably on our way into the blue C wave down, into the orange box between 63,300 and 74,800. The box is support. It's not a target. Around 75,000 sit the liquidation block and the swing low of the 16th of September. If Bitcoin breaks above the red zone, the orange alternative comes into play. A larger way for correction. But the door for that only really opens above the resistance area and specifically also above the highs around 87,250. Look, I'd like to see a one-two setup or a clear break above resistance first. Look, I'm only talking about what I'd do myself. And again, this is not financial advice. If I wanted to trade a possible five wave, move up from here, my invalidation would be the 8th of October low. And if the correction comes, the orange box is where I'd accumulate myself probably around 75,000 starting there. Okay, and if we look at the questions, yeah, in every video I offer you guys to leave a question, yeah, any request or just feedback. And look, the one from today is from Athanasios. Thanks for supporting the channel. And thank you, he said. If the assumption is a local top is in for Bitcoin, will Bitcoin bring the altcoins down with it? Or will altcoins continue to outperform Bitcoin? See, I don't think altcoins are currently broadly outperforming Bitcoin. What we can do, we can take a look at, first of all, Bitcoin dominance. For really the broader altcoin sector to outperform Bitcoin, we need a break below this red line. See, Bitcoin dominance has been in a sideways range here for quite a bit. I mean, since August 2025. I mean, more than a year, we've been in the sideways range. And so whatever Bitcoin does, the broader altcoin sector tends to follow simply because we're in a range. Okay, so they move kind of in balance. Now, if you say altcoins are outperforming Bitcoin, you refer to some. Okay, you refer to some. You do not refer to the broad altcoin sector. Not as a whole. Right. And whether I'm looking at this here, which is the, let's say, the normal Bitcoin dominance, which could stay in this range for a bit. I mean, that's been my view for quite a long time that we're likely here in this triangle, which seems to be playing out. I know it's not great, but it is what it is. Or whether we're looking at a Bitcoin dominance excluding stable coins. It shows you that, well, the altcoins are not really outperforming. I mean, you could say, if you call this altcoins are outperforming, I mean, from the top in May 2026, if you exclude stable coins, I mean, maybe. But even then you see that since end of September, it's going up again. And then overall, I mean, we are still way above the September low last year. Way above. We're even above the January low 2026. No, sorry. Yeah, it's the January low. So, look, there is much more work needed to really confirm a proper altcoin cycle. What you see right now, that's some selected altcoins pumping. And I said many times that, you know, it can still be a favorable situation for some of these altcoins, as long as Bitcoin, as long as Bitcoin can sort of hold this area, right? I mean, we have not seen a decisive break lower yet. This is still overall range bound, three waves down. I talked about that over the last few days. But yeah, if we see further downside, I think some of these altcoins that are currently trying to break out, they are making a break. They're going to make a break. And you see that, I mean, Zcash performed really well, but it's now correcting with Bitcoin. So you see they, that's why Bitcoin dominance, because of that, you know, Bitcoin dominance is in a range. So many of these will just tend to follow Bitcoin. Now that might change a bit as soon as we get the breakdown on Bitcoin dominance, but we are not there yet. So what really happens to Bitcoin on inflation day? Well, I would prepare for two volatile hours, but the data shows that there's barely a more volatile day and there's no clear direction beforehand. So the number is the trigger. And for me, the chart decides the direction. Then you have all the levels with the data I gave you, all the levels. We've got our resistance. We've got our support. After that come the Fed on the 28th of October and the options expiry on the 30th of October. If anything changes on the chart, you will, of course, hear it here. And of course, let me know in the comments, do you think Wednesday's number will take Bitcoin through the red zone? Do you think we go higher directly? Or do you think we are in this larger correction? Now, the CPI, order flow and funding rate pages from this video, they are available in our MCO terminal. It's included in every membership on mcoglobal.com at no extra cost. The link is in the pinned comments and in the description. I hope it was helpful. Thanks so much. And I'll see you in the next video. [00:12:52] Speaker ?: I'll see you in the next video.