Short-Term Crypto Rally Possible After US CPI Data Releas? Here’s why
US CPI Data: The U.S. Bureau of Labor Statistics released the January consumer price index (CPI). This could have a significant ripple impact on the markets in the weeks ahead. The Federal Reserve committee’s recent meeting, amid hopes that the US economy will continue to go disinflationary, slowed down its rate hike pace. This had a positive impact on the markets. Both stocks and cryptocurrency found optimism in the Fed’s expectations for the economy’s path towards disinflation over the next months. This context is why traders anticipate a decrease in inflation for January which would increase market sentiment in the same direction.
Also read: US CPI Set to Decline Here are the Trends
A widespread market rally is possible if the CPI data falls within the market expectation range at 6.2% year over year. Analysts at JP Morgan believe that such a rally will likely be short-lived. This could be another ‘buy-the-news’ event for crypto traders. The U.S. Dollar Index, which has an inverted correlation with Bitcoin (BTC), shows clear signs of a possible rally. In anticipation of the inflation data, futures linked to Dow Jones and S&P 500 are trading in positive territory.
The macro sentiment will determine whether or not the crypto market breaks out of its current range. After breaking the correlation with stock markets after the FTX collapse Bitcoin (BTC), price is responding in line with the markets. The recent regulatory pressures around Binance BUSD could help crypto price recover from its bearish sentiment. It remains to be seen how much longer this bullish momentum will continue in the crypto market.
Also read: Bitcoin Price May Hit $25K after US CPI Data. Here’s Why
According to CoinGape’s price tracker, Bitcoin is currently at $21,852, an increase of 0.71% over the previous 24 hours.
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