The Crypto Market Faces Crucial Week as US Releases Inflation Data
This week, the release of US Consumer Price Index (CPI) and Producer Price Index (PPI) data will play a crucial role in the crypto market. The data will make it easier for the Federal Open Market Committee (FOMC) to decide on interest rate hikes. If the CPI comes in higher than July’s figure of 3.2% and the core annual CPI cools to 4.3% from July’s 4.7%, it could lead to a rebound in Bitcoin and Ethereum prices. The market expects the monthly core PPI data to also cool down.
US Federal Reserve Likely to Pause Rate Hikes
The US Federal Reserve is expected to pause rate hikes as the jobs market cools and the unemployment rate increases. Traders are eagerly awaiting the CPI data to determine the market’s direction. The CME FedWatch Tool indicates a 93% probability of a pause at the next FOMC meeting. Wall Street analysts also believe there may be a rate hike at the end of the year. However, the US dollar index remains high, potentially keeping Bitcoin prices under pressure.
Eurozone Interest Rate Hike Decision Expected
On Thursday, the European Central Bank will announce its interest rate hike decision. The forecast suggests a pause in rate hikes after a series of increases since last year.
Crypto Market: Bitcoin and Ethereum Prices Affected
The crypto market is currently experiencing a lull due to the strengthening of the US dollar (DXY) and the delay in the SEC’s decision on spot Bitcoin ETFs. While traditional market participants are pressuring the SEC to approve a Bitcoin ETF, Bitcoin (BTC) and Ethereum (ETH) prices are under pressure.
Bitcoin’s price has been trading sideways around $25,862 in the last 24 hours and last week. However, there has been an increase in trading volume, indicating growing interest among traders. Ethereum’s price has fallen 1% in the last 24 hours and nearly 2% in the last week, currently trading at $1615. Despite the price drop, trading volume has increased by 85% in the last 24 hours.
Hot Take: Crypto Market Awaits US Inflation Data to Determine Direction
The crypto market’s fate hinges on the upcoming US inflation data. The release of the CPI and PPI figures will provide insight into the Federal Reserve’s decision on interest rate hikes. If the data confirms a pause in rate hikes, Bitcoin and Ethereum prices may rebound, leading to a bullish outlook for the rest of the year. Meanwhile, the market remains cautious due to September historically being a challenging month for markets. Additionally, the European Central Bank’s interest rate hike decision on Thursday is expected to bring further clarity to the market. Traders should closely monitor these developments to make informed investment decisions.
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