Lower-than-expected CPI, a quick BTC bounce, and a suddenly softer US dollar—but the real signal isn’t the green candle. With rate-cut odds rising into the next FOMC, yields slipping, and options positioning skewed toward $120K, the market is flirting with a breakout narrative while liquidity and trend still warn “prove it.” Here’s how to navigate the line between momentum and a head-fake.

US CPI Cools vs. Expectations

September headline CPI printed 0.3% MoM (vs. 0.4% expected) and 3.0% YoY (below 3.1% expected), although YoY ticked up from 2.9% in August. Core CPI slowed to 0.2% MoM (vs. 0.3% expected) and 3.0% YoY (vs. 3.1% expected). With the BLS limiting other economic releases amid a government shutdown, this CPI takes on outsized importance for policy.

The macro tape confirmed risk-on hints: DXY slipped below 99 and the 10-year U.S. Treasury yield eased toward ~3.98%, the lowest since April—both supportive of crypto beta if they persist.

BTC Reaction: Relief, Not Yet Escape Velocity

Bitcoin jumped from roughly $110.6K to $111.7K within hours and hovered near $111,541, with a 24h range of $108,802–$111,513. Yet spot volume fell ~28%—a classic sign of relief rather than confirmed trend. Structurally, BTC remains below the 21‑week MA, a historically reliable bull–bear boundary, keeping bias neutral-to-cautious until reclaimed.

FOMC Path: Cuts Back in Play

Per CME FedWatch, odds for another 25 bps cut in October increased, and Chair Powell recently hinted at more easing as the labor market cools. A softer policy trajectory plus a weaker dollar is constructive for crypto, but the edge goes to traders who demand confirmation on price and breadth—especially with liquidity thin.

Key Levels and Trade Plan

Price respected the $110,000 support; a clean reclaim of $113,000–$114,000 could unlock topside momentum toward the options market’s favored $120K magnet. Until then, treat this as a range with traps.

• Continuation trigger: Higher-timeframe close above $113K–$114K with rising spot volume and improving perp funding skew. Target $118K–$120K; trail stops under reclaimed levels.
• Range approach: Fade extremes inside $108.8K–$114K only with clear rejection wicks and declining open interest; avoid chasing mid-range.
• Invalidation: Lose $110K on volume → look for liquidity sweeps near $108K/$105K; stand aside if DXY rebounds back above 99 with yields rising.
• Options idea (defined risk): Modest upside view → debit call spread (e.g., $115K/$120K) into FOMC; avoid naked short vol in thin tape.
• Macro confirms: Sustained DXY below 99 and 10Y yields sub-4% strengthen the risk-on case; a hawkish pivot negates.

Risks That Could Flip the Script

A surprise inflation re-acceleration, hawkish Fed rhetoric, or a quick dollar/yield rebound can stall crypto beta. Low liquidity magnifies wicks and forced moves. Note that institutional desks (e.g., Matrixport) still call for a range until confidence returns—respect that until price proves otherwise.

The One Takeaway

The path to $120K runs through a decisive reclaim of $113K–$114K with volume and breadth. Until that happens, it’s a range market—trade levels, not hopes, and let the dollar and yields be your tell.

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