Bitcoin is another asset likely to be influenced by tomorrow’s CPI announcement and the Fed’s reaction
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Bitcoin/USD - Higher Volatility Expected after CPI Release
Bitcoin is another asset likely to be influenced by tomorrow’s CPI announcement and the Fed’s reaction. This is primarily due to the cryptocurrency market’s correlation with risk sentiment and global monetary policies. A positive note for Bitcoin is that the Prelim UoM Consumer Sentiment on Friday increased from 64.9 to 66.4. Strong sentiment tends to result in a higher risk appetite. However, this will not be important if inflation signals resilience.
The overall market capitalization has declined slightly over the past 2-weeks, but the figure remains above $1 trillion, which is critical. On the positive side, Bitcoin's market share has increased to 41.50%. This is significantly higher than data seen in 2022, where this figure bottomed out at just below 38%.
Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM
Bitcoin’s price is hovering above a resistance level which has been flipped onto the support. The decline witnessed mid-last week has lost momentum over the weekend and this morning. However, even with a loss of downward momentum, the price has not obtained any significant bullish signals so far. The price is expected to experience higher volatility after tomorrow’s Consumer Price Index announcement. A higher than expected CPI figure can trigger more pressure, whereas, a lower figure may fuel another bullish trend
Summary:
- The US Dollar experiences mixed price movement as traders focus on tomorrow’s CPI announcement.
- CPI data is expected to show 0.5% which is the highest since July 2022 and Core CPI figures are also expected to rise to 0.4%.
- The ECB continues to send bullish indications to market participants as inflation remains higher than in the US.
- Bitcoin market share has increased to 41.50% and the overall market capitalization for the crypto market remains above $1 trillion.
