The U.S. Bureau of Labor Statistics will release the April CPI inflation report on May 12, and crypto traders are preparing for major volatility. Economists expect inflation to rise again, which could delay Federal Reserve rate cuts and pressure Bitcoin below key support levels.
But if inflation cools, Bitcoin could quickly rally toward $90,000 again.
According to market estimates, April inflation is expected to come in much hotter than March.
Economists are currently expecting headline CPI to rise by 0.6% month-over-month, while annual inflation is forecast to increase to 3.7%, up from the previous 3.3% reading.
Meanwhile, core CPI is projected to come in at 2.7% year-over-year, with monthly core inflation expected to rise by 0.4%.
Prediction markets are also signaling higher inflation data. On Polymarket, traders are assigning a 100% probability that inflation in 2026 remains above 3%, along with a 94% chance it stays above 3.5%.
However, some analysts believe inflation could come in even hotter.
Adding to growing inflation concerns, Edward Dowd warned that April CPI could climb as high as 4.1%. He believes the U.S. economy is facing rising recession risks, persistent oil-driven inflation, and weakening consumer demand.
A hotter-than-expected CPI reading would likely reinforce the Fed’s “higher for longer” stance on interest rates, especially after Jerome Powell recently emphasized that policymakers still need more confidence inflation is moving back toward the 2% target.
If the April CPI report comes in hotter than expected, analysts believe crypto markets could face immediate selling pressure. Several traders are warning that Bitcoin could fall back toward the $80,000 level, retest the key $78,000 support zone, or even revisit the $70,000 range if panic selling intensifies.
The market remains especially sensitive after Bitcoin recently failed to maintain momentum above the $82,000–$84,000 resistance area.
If inflation comes in lower than expected, markets could quickly begin pricing in potential. Bitcoin may gain momentum toward the unfilled CME gap near $93,000, along with the broader $90,000–$95,000 resistance zone that traders are closely watching.
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