The post Bitcoin Price Poised to Slip Below $18k Ahead of CPI Data Today appeared first on Coinpedia Fintech News
The September US Consumer Price Index (CPI) data has a significant impact on the cryptocurrency market sentiment. Stocks have fallen today as the CPI report is to be revealed, but so far, Bitcoin has been trying to hold up.
As traders anticipated Thursday’s release of inflation data, the price of bitcoin scarcely changed on Wednesday, but on Thursday, the price fell below $19,000. At the time of writing, the largest cryptocurrency by market cap was trading for $18,691, an insignificant decrease of 2.4% over the previous day.
The CPI report may indicate that the Federal Reserve will continue to aggressively raise interest rates in an effort to slow the economy and rein in growing inflation, depending on the outlook. While the rest of the world’s markets have been volatile recently, bitcoin has dived lower than the previous day and has been performing worse.
Will the Fed increase the rates by another 75bps?
At the Jackson Hole Symposium on August 22, Fed Chair Powell set the tone, and the market has battled ever since the release of the August CPI report. The September CPI report which is to be released today will gain a lot of attention.
A 75-basis point rate increase in November and December may be assured with regard to the rising inflation data. With the US unemployment rate at just 3.5%, the Fed is in a favorable position to front-load rate increases.
Consumer prices are the driving force behind the Fed’s position on policy guidance. At the moment, central banks are taking hawkish actions like unloading their balance sheets and raising interest rates. As a result, there is a significant sell-off in the stock market.
The cryptocurrency market, which has a high correlation to the stock market, is also having a difficult time. A worse-than-anticipated CPI last month led to a 100 bps increase in market pricing. If the CPI is worse than expected, the cryptocurrency market may have a similar response.