While the re-accelerated trade talks between the US and China have brought some relief to global markets, the focus of crypto investors has shifted to the Consumer Price Index (CPI) data to be released today. Especially in the Bitcoin and altcoin market, the directional effect of the CPI is once again on the agenda.
Bitcoin and altcoin investors are watching the CPI
The inflation data to be released at 15.30 today is of great importance for cryptocurrency investors. CPI data is an important indicator for the US Federal Reserve (Fed) to shape its interest rate policy. If inflation comes in below expectations, it strengthens the expectation that the Fed will not pursue an aggressive interest rate hike policy. This may cause the dollar to depreciate and investors to turn to alternative assets.
Looking at historical data, it is seen that there were serious rises in crypto markets when the CPI was low. For example, the lower-than-expected inflation in the data released in December 2023 caused Bitcoin to gain more than 7% in two days. On the other hand, inflation exceeding expectations brings with it the expectation that the Fed will postpone its interest rate cut plans or bring new increases to the agenda. This poses a risky scenario for cryptocurrencies, as rising interest rates can suppress risk appetite and accelerate capital outflows from crypto assets.
Therefore, today's CPI data is a critical threshold for the short-term direction of Bitcoin, Ethereum and major altcoins. Increased volatility, especially in crypto exchanges where leveraged transactions are intense, may expose investors to the risk of sudden liquidation.
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Although US 10-year bond yields have declined in recent days, the dollar index continues to move upwards. This shows that investors are waiting in a cautious position.
Bitcoin price is trading at $109,471 at the time of writing. BTC, which fluctuated between $ 108,616 and $ 110,249 during the day, exhibits a neutral position for investors. However, it is worth noting that the leading cryptocurrency rose 4 percent on a weekly basis.
While a horizontal and unstable course is generally observed in altcoins, investors are waiting for the inflation data to be announced at 15:30 for direction determination.
In the light of all these developments, investors are locked on the CPI data for May, which will be announced at 15.30 today. A data below expectations may lead Bitcoin to climb above $ 70,000 again. Otherwise, lower support levels may be tested again. This data may be the most critical momentum of the week for the direction of the crypto markets.
