Major news today:

U.S. Consumer Price Index (CPI) report. This is an important indicator of inflation levels.

Analysis as follows:

Meaning:

CPI shows the price changes of goods and services in the U.S. over the past months/years. It is the primary reference indicator for the Federal Reserve's decisions on raising, lowering, or maintaining interest rates.

Why the cryptocurrency market cares:

The cryptocurrency market (similar to stocks) is very sensitive to CPI because it reflects the degree of monetary policy easing or tightening.

Lower inflation → Higher probability of rate cuts → Increased market liquidity → Positive for risk assets such as Bitcoin, Ethereum, and altcoins.

Higher inflation → Longer maintenance of high rates or even continued rate hikes → Negative for cryptocurrencies.

Possible impact scenarios:

CPI lower than expected: The dollar may weaken, and stocks and cryptocurrencies often surge, as traders anticipate looser monetary policy.

CPI higher than expected: The dollar strengthens, and risk assets (including cryptocurrencies) may decline, as the market worries about tightening monetary policy.

CPI in line with expectations: Usually less volatility, unless the market had a strong bias in one direction.

In summary, a significant volatility spike may occur at 8:30 AM Eastern Time in the U.S. in the cryptocurrency market, often meaning a sudden large bullish or bearish candle within minutes.

Do you think China is paying attention as well?