Crypto market falls ahead of the US CPI data release

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As a researcher with extensive experience in following the cryptocurrency market and economic indicators, I have observed that the release of the U.S. Consumer Price Index (CPI) report can significantly impact both traditional financial markets and the crypto sector. Based on the information provided in this text, it appears that the majority of analysts anticipate a soft decrease in the inflation rate for June 2024, which could potentially lead to a Fed rate cut in September. Historically, I have noticed that a decline in the U.S. inflation report can potentially trigger a bullish momentum for the crypto market, while an increase might result in bearish corrections. Given this context, it is essential to closely monitor the CPI report and its potential implications for both traditional financial markets and the crypto sector. In my opinion, the release of the CPI report could serve as a significant catalyst for market movements in the near term.

Before the unveiling of the latest U.S. inflation figures, the value of major cryptocurrencies took a dip.

The anticipated U.S. Consumer Price Index (CPI) update for June, set to be unveiled at 08:30 ET (12:30 UTC), is widely predicted by American banks and financial institutions to reveal a moderate decrease in the inflation rate. As per the assessment of Jesse Cohen from Investing.com, this reduction is projected to fall within the range of 3% and 3.2%.

As a financial analyst, I would interpret the US June CPI inflation estimates as follows based on the projections of various financial institutions:

— Jesse Cohen (@JesseCohenInv) July 10, 2024

According to Morgan Stanley’s estimation as mentioned in Cohen’s X post, the Consumer Price Index (CPI) is predicted to amount to a 3.5% increase from the previous year by June.

As a researcher studying economic trends, I would interpret a June inflation rate of approximately 3.1% as potentially boosting the likelihood of a Federal Reserve interest rate reduction in September. Cohen further emphasized this point in the X thread.

“Anything above 3.5% and you can forget about rate cuts in 2024.”

Inflation decreased from 3.4% in April to 3.3% in May, according to crypto.news. This is the smallest decrease since April 2021. As a result, the cryptocurrency market experienced a widespread recovery, with Bitcoin (BTC) exceeding $69,000 on June 12 – the day the inflation report was made public.

As a seasoned crypto investor, I’ve noticed a pattern where the market tends to experience bearish corrections preceding the Consumer Price Index (CPI) reports. Sadly, this trend held true once more.

I’ve analyzed the crypto market and found that its total capitalization has dropped by 1%, reaching a current value of approximately $2.24 trillion as of this moment. Bitcoin, in particular, has experienced a decline of around 2% and is now hovering near the $57,900 mark.

A decrease in the U.S. inflation rate could indicate a positive trend for the cryptocurrency market, possibly leading to broad market growth. Conversely, an increase in inflation might negatively impact the crypto sector.

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2024-07-11 09:50