- The Consumer Price Index is expected to have dropped to 3.3% from 3.7% YoY.
- The CPI data might act as a strong trigger to move the crypto market in either direction.
Bitcoin is causing widespread anxiety due to recent unfavorable developments. Despite reaching a high of $38,012 for the first time in 18 months, its value has fluctuated widely over the previous three days. At the time of writing, Bitcoin is trading at $36,745, down 0.74% in the last 24 hours as per data from CoinMarketCap. However, the trading volume is up 39.40%.
Moreover, data from IntoTheBlock shows that Bitcoin is inclined towards the bearish phase. Net network growth and large transactions are two further metrics that point to a downward trend. Despite the recent correction, the price is still up 36.67% in the last 30 days.
High Volatility Expected
A new trigger might come from Tuesday’s Consumer Price Index (CPI) if bulls’ excitement about the potential approval of a spot bitcoin ETF has waned.
Monthly headline CPI is expected to have slowed to 0.1% in October from 0.4% in September, according to economists. The Consumer Price Index is expected to have dropped to 3.3% from 3.7% year-over-year. It is anticipated that the core CPI, which excludes food and energy expenses, would have stayed unchanged at 0.3% monthly and 4.1% annually from September.
Both metrics are still much higher than the Federal Reserve’s 2% goal. Although the central bank has signaled that inflation falling to 2% is not required before rate rises are halted and rate reductions are considered, speakers have made it plain they want to see continuous progress towards that objective.
Bitcoin might benefit from the prospect of a lower rate environment to the degree that higher rates compete with risk assets for investor money. Contrarily, Bitcoin and other cryptocurrencies might witnesses severe selling pressure if inflation turns out to be greater than projected.
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