Bitcoin falls below $82K after hotter September CPI inflation

Bitcoin slid below $82,000 after the Wall Street open on Wednesday as the September US Consumer Price Index came in above expectations. Crypto, gold and stock-market futures all dropped after the release, according to TradingView data cited in the report. The largest cryptocurrency was still hovering around the $82,500 to $83,400 region, where analysts are watching to see if it holds as support.

The Bureau of Labor Statistics said headline CPI rose 3.7% year-on-year, a tenth of a percentage point above the consensus forecast. Gasoline prices jumped 9.1% in September and accounted for more than half of the monthly increase in all items, while the energy index climbed 5.2% after a 2.1% rise in August. Core inflation, which excludes energy and food, also exceeded expectations at 2.6% year-on-year. The report pointed to fuel costs linked to the Middle East conflict and oil-supply crisis.

The inflation surprise rippled across markets beyond crypto. Gold fell to as low as $4,079 per ounce, and US bond yields spiked, with the 10-year Treasury yield touching 5.329%, roughly three basis points short of a fresh 24-year peak. Economist Robin Brooks wrote in a blog post that the CPI reading arrived at a bad moment for global bond markets, which had appeared to be calming before the sell-off reignited.

Rate expectations shifted quickly after the CPI release. CME Group's FedWatch Tool showed a majority now favoring a 25-basis-point rate hike at the Federal Reserve's Oct. 28 meeting, with odds at 53.7% versus 22.1% a day earlier. For December, the odds of a second 25-basis-point hike stood at 50%. Theresa Sheehan, an economic analyst at Econoday, said the FOMC will probably hold rates steady at its Oct. 27-28 meeting but with a clear bias toward a December increase, especially given soft September payrolls.

Sonu Varghese, chief macro strategist at Carson Group, told CNBC that investors remain surprised by broad-based inflation, which he suggested should not have been a shock. He added that the full impact of higher diesel prices and the AI boom is still to come. The next key inflation data point is September's Producer Price Index, due Friday. Bitcoin's price action remained focused on the $82,500-$83,400 area, with market participants waiting for a decisive move on whether it acts as support.