XRP faced significant selling pressures following the release of the September Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics, which surpassed expectations across several key indicators.
The CPI report sparked worries about ongoing inflation and led to a ripple effect across financial markets, impacting cryptocurrencies as well. Bitcoin (BTC) and other assets collectively lost billions within a short span of time.
US CPI Surpasses Expectations
To provide some context, consumer prices saw a month-over-month increase of 0.6%, pushing annual inflation up to 3.7% from 3.4% in August.
This figure also exceeded analysts’ consensus estimate of 3.6%, reversing the slight disinflation trend observed earlier in 2026. The unexpected uptick raised fears that inflation may remain higher for a longer period than previously assumed.
A notable factor contributing to this rise was the increase in energy prices. Specifically, gasoline costs surged by 9.1% in September, accounting for nearly half of the monthly CPI increase, whilst overall energy prices gained 5.2%.
The core CPI, which excludes food and energy prices, registered a 0.3% rise month-over-month against a forecast of 0.2%. Annual core inflation increased to 2.6% from 2.4%, surpassing the anticipated 2.5% level. Additionally, real earnings dropped by 0.5%, igniting concerns about the impact of ongoing inflation on risk assets like XRP.
The unexpectedly high inflation report reshaped market expectations regarding the Federal Reserve’s forthcoming policy decisions.
Treasury yields saw a notable increase, while stock futures retreated as traders recalibrated the chances of further interest rate hikes ahead of the Fed’s meetings on October 27-28. Prior to the release of the report, markets had estimated a 64% likelihood of additional monetary tightening.
XRP and Bitcoin Dip Following CPI Report
The cryptocurrency market reacted swiftly to the CPI results. Bitcoin experienced a 1.23% decline within 15 minutes, falling from $83,794 to $82,765 as fears about tighter monetary policies spurred extensive selling.
XRP followed suit, yielding a 1.63% loss in under 15 minutes as its price dipped from $1.38 to a low of $1.3574, before making a slight recovery.
During the 15-minute window from 12:30 PM to 12:45 PM UTC, XRP’s candlestick recorded its most significant decline since the previous Thursday, dropping 1.35%. The broader cryptocurrency market saw around $40 billion in market value vanish within 45 minutes.
This selloff adversely affected XRP’s short-term technical outlook after the token initially slipped to $1.3574. It subsequently decreased another 0.40% to $1.3566, breaking below the $1.3624 support level, which had previously absorbed selling pressure during the trading day.
As buyers attempted a comeback to reclaim the $1.3624 level, sellers countered, converting this former support into a resistance zone.
XRP’s 15-minute Relative Strength Index (RSI) illustrated the magnitude of the decline, falling from 63.35 to 37.27 in under 30 minutes. During this time, XRP was attempting to stabilize and revert toward $1.36, but sellers continued to defend the $1.3624 mark, hampering recovery efforts.
Potential Implications of a High CPI on XRP
The robust CPI data for September may shape XRP’s trajectory as we approach the fourth quarter. The token started October with a remarkable 48% gain during the third quarter, its strongest quarterly performance in four years.
However, XRP still remains 59% below its all-time high of $3.65 reached in July 2025 and holds a year-to-date decline of 17.6%.
Analysts had noted the $1.35-$1.38 range as crucial for near-term support. The drop beneath $1.3624 now subjects this entire range to increased scrutiny, particularly if inflation continues to affect investor sentiment.
A sustained breach of this range could undermine any recovery momentum, while renewed buying interest might help the token regain stability.