Reserve

Jerome Powell

April

Notable

All eyes are on the upcoming announcement of the US Consumer Price Index (CPI) data for June as the <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noopener nofollow">crypto</a> market negotiates choppy waters. This much awaited economic indicator has the power to change investor mood, therefore impacting Federal Reserve policy and maybe affecting world financial markets. 
<h2 id="strong-variability-in-the-market-prior-to-cpi-announcement-strong">Variability In The Market Prior To CPI Announcement</h2> 
Prior to the CPI release, the cryptocurrency market saw considerable turbulence. Blockchain technology’s most prominent token, Bitcoin, has gone up and down in tandem with investor optimism and pessimism. Traders and experts alike are keeping a careful eye on inflation predictions that may influence the<a href="https://www.fxempire.com/forecasts/article/bitcoin-btc-news-today-us-cpi-report-and-etf-inflows-will-bitcoin-break-60000-1445147" target="_blank" rel="noopener nofollow"> Federal Reserve’s future moves.</a> 
<h2 id="strong-market-mood-and-inflation-expectations-strong">Market Mood And Inflation Expectations</h2> 
With projections ranging from 3% to 3.2% year-over-year, experts at Investing.com find that the consensus among US banks and investment companies is towards a little decrease in inflation. But Morgan Stanley’s outlier projections of a more tenacious inflation rate of 3.5% YoY suggest possible conflict among financial institutions on economic outlooks. 
Notable expert<a href="https://publish.twitter.com/?query=https%3A%2F%2Ftwitter.com%2FJesseCohenInv%2Fstatus%2F1811162117841604887&amp;widget=Tweet" target="_blank" rel="noopener nofollow"> Jesse Cohen</a> included in the study stresses the important threshold: Anything beyond 3.5% and you can forget about rate reduction in 2024. This comment emphasises the great stakes connected to the <a href="https://www.youhodler.com/blog/us-cpi-data" target="_blank" rel="noopener nofollow">CPI data</a> today, when even little deviations might affect market expectations and cause notable changes in the market. 
<blockquote class="twitter-tweet"> 
 <img src="https://s.w.org/images/core/emoji/15.0.3/72x72/1f1fa-1f1f8.png" alt="🇺🇸" class="wp-smiley" style="height: 1em; max-height: 1em;"><img src="https://s.w.org/images/core/emoji/15.0.3/72x72/1f1fa-1f1f8.png" alt="🇺🇸" class="wp-smiley" style="height: 1em; max-height: 1em;"> US JUNE CPI INFLATION ESTIMATES 
 •TD BANK: 3.0% •SCOTIABANK: 3.0% 
 •JP MORGAN: 3.1% •WELLS FARGO: 3.1% •CITI: 3.1% •BARCLAYS: 3.1% •BNP PARIBAS: 3.1% •NOMURA: 3.1% •<a href="https://t.co/LOppBTC8mR" rel="nofollow" target="_blank">https://t.co/LOppBTC8mR</a>: 3.1% 
 •BANK OF AMERICA: 3.2% •GOLDMAN SACHS: 3.2% 
 •MORGAN STANLEY: 3.5%… <a href="https://t.co/CY7EoNwXaz" rel="nofollow" target="_blank">pic.twitter.com/CY7EoNwXaz</a> 
 — Jesse Cohen (@JesseCohenInv) <a href="https://twitter.com/JesseCohenInv/status/1811162117841604887?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">July 10, 2024</a>
</blockquote> On Negative Corrections &amp; Strong Rebounds 
The results of the CPI study have ramifications for the bitcoin industry outside conventional financial markets. In past times, the crypto market has shown susceptibility to macroeconomic data like inflation figures. 
Before past CPI announcements, there has been a trend of negative corrections followed by possible recoveries contingent on the actual inflation data. 
<img loading="lazy" decoding="async" class="aligncenter size-full" src="https://www.tradingview.com/x/zyJuNxI7/" width="2475" height="1163"> 
Recent history reflects this: in April, inflation remained at 3.4%; it dropped slightly to 3.3% in May, attesting to its lowest level since April 2020. Along with a market-wide recovery, this fall matched a surge in Bitcoin beyond the $69,000 level soon after the June inflation announcement. 
<a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noopener nofollow">Currently hovering at $58,245</a>, Bitcoin’s performance is under intense observation by investors, which shows a meagre 0.8% drop over the previous 24 hours. Bitcoin has maintained a 1.0% rise during the week despite temporary swings, demonstrating resilience among market uncertainty. The Road Ahead 
Today’s CPI report will act as a litmus test for next monetary policy choices, even if recent testimony by Federal Reserve Chair Jerome Powell points to a good picture of economic recovery. 
With a present value of $2.24 trillion, the worldwide crypto market cap shows a little 1% drop over the last day, therefore highlighting cautious optimism restrained by inflationary worries. 
Featured image from Wealthway fx, chart from TradingView

Inflation Fears Spook Crypto: Market Dives Before Key US Data

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