Why is crypto crashing today? It’s not just CPI positioning

Investors are adjusting their positions ahead of an important macroeconomic week.

On the 14th of October, the US is scheduled to release its CPI data for the month of September. This report is crucial as CPI rose 3.4% year over year in August, while the monthly inflation jumped by 0.4%.

The stubborn inflation pressured the Federal Reserve into raising interest rates by 0.25% in September. Naturally, this CPI data will affect the central bank’s rate decision in the upcoming FOMC scheduled for the 28th of October.

But why is crypto crashing? Is it simply cautious positioning ahead of CPI? The U.S. Dollar Index (DXY) has broken above 102 for the first time after five consecutive weeks of gains, with the dollar now on track to see its best week since early March 2025.

A rising dollar is often a negative factor for the price of risk assets.

In short, capital seems to be flowing back into safe assets. That being said, it also explains why crypto is crashing. A strong dollar reduces the capacity of other countries to repay dollar debts, thus damaging the global economy.

As a result, investors are selling their riskier assets (i.e., Bitcoin, altcoins) and converting them into safer bonds, which, in turn, lowers their prices.