CPI Report Tuesday Could Provide Next Bitcoin Catalyst

After a major five-week run that took its price nearly 40% higher, bitcoin (BTC) has stalled for the past several days around the $37,000 area. To the extent that enthusiasm around possible approval of a spot bitcoin ETF has run out of some fuel, bulls might be looking to Tuesday's Consumer Price Index (CPI) as a fresh catalyst higher.

Economists expect monthly headline CPI in October to have slowed to 0.1% from 0.4% in September. Year-over-year CPI is anticipated to have fallen to 3.3% from 3.7%. The core CPI, which strips out food and energy costs, is expected to have remained flat from September – 0.3% monthly and 4.1% year-over-year.

Both gauges remain well above the U.S. Federal Reserve's 2% target. While the central bank has indicated that inflation doesn't need to fall all the way to 2% as a requisite for ending rate hikes and considering rate cuts, speakers have made clear they want to see continued progress toward that target.

To the extent that higher interest rates compete with risk assets for investor dollars, the idea of a lower rate regime might provide a boon to bitcoin. The opposite – of course – also holds, and should tomorrow's inflation report come in faster than anticipated, crypto prices are likely to give back more of their October advance.