US CPI Data Release: Impact on Crypto Market
The crypto market is on edge as the US CPI data is set to release today at 12:30 UTC. Will consumer inflation data shake up the crypto markets with a potential rally or halt?
Summary
- US CPI data projected to rise by 0.3% this month, economists predict.
- Crypto market anticipates impact of CPI data release on ongoing rally.
Following the recent rally driven by producer inflation data easing by 0.7% in August, all eyes are now on the US CPI data release scheduled for today at 12:30 UTC. Economists are forecasting a 0.3% rise in the consumer price index for August, building on the 0.2% increase seen in July.
Projections suggest a 2.9% year-on-year growth in CPI, up from 2.7% in July, with potential for the figure to exceed expectations. A weaker CPI outcome could reinforce expectations for monetary easing by the Federal Reserve, potentially leading to an interest rate cut at the upcoming meeting.
If the CPI data aligns with expectations, indicating a rise in inflation, alternative assets like gold and crypto could see a surge as hedges against inflation. However, lower-than-expected inflation rates could strengthen the dollar, impacting alternative assets negatively.
Crypto Market Response to US CPI Data
The crypto market, as per data from CoinGecko, has been showing positive momentum recently. Major cryptocurrencies like Bitcoin, Ethereum, and XRP have seen gains, pushing the overall market cap above $4 trillion.
Bitcoin, the leading cryptocurrency, has been consolidating above $114,000, with a potential breakout looming depending on the CPI data release. A softer CPI could signal Fed interest rate cuts, boosting demand for risk assets like Bitcoin. On the contrary, higher inflation pressure could lead to a dollar surge and a potential correction in Bitcoin’s price.
Traders are closely watching the CPI data release, with expectations already factored in for softer inflation. Any surprises could lead to sharp market reactions. Additionally, the surge in stablecoin reserves on exchanges indicates a readiness among traders to deploy funds into crypto assets post the CPI data revelation.