Recent Trends
U.S. CPI YoY came in at 2.7% for July, slightly below forecasted 2.8%, while core CPI remained elevated at 3.1%.
The softer-than-expected inflation reading drove markets higher and boosted the probability of a Federal Reserve rate cut in September to 92%.
Crypto reacted swiftly:
Bitcoin rallied past $119K,
Ethereum surged above $4.4K,
Total crypto market cap ticked upward.
Why This Matters for Crypto
The CPI is more than just an economic stat—it signals monetary policy direction and investor sentiment. Here's how it affects crypto:
Scenario Crypto Impact
CPI below forecast Markets expect Fed easing → liquidity flows into risk assets like crypto.
CPI above forecast Rate hike fears rise → pressure on crypto and other volatile assets.
In this case, the reading was mildly dovish, aligning with market optimism and fueling crypto gains.
How to Play It
Stay aligned with macro signals: Use CPI data as a barometer for liquidity sentiment—ecxpect rallies when it’s soft.
Focus on reaction strength: Strong green candles with volume after CPI reflect genuine bullishness.
Use caution near resistance levels: Overextended charts may reverse sharply on rate fears—even if CPI looks manageable.
TL;DR
U.S. CPI came in softer than expected, raising rate cut expectations and sparking a bullish surge in crypto, especially BTC and ETH. #CPIWatch is essential—because once inflation shifts, crypto sentiment—and price—can follow Swiftly.