The crypto market is looking forward to the release of the US Consumer Price Index (CPI) inflation data this week. After the latest jobs data showed signs of a slowdown in the labor market, investors are now increasingly optimistic that the Federal Reserve (The Fed) may soon cut interest rates. Bitcoin even broke through the $100,000 mark after the jobs data was released, reflecting positive sentiment in the market.

Crypto Market Enters Crucial Week

Global investors are currently watching several key economic indicators scheduled for release in the next few days. In addition to the US CPI, other important data such as the US Producer Price Index (PPI) and the testimony of Fed Chairman Jerome Powell before Congress are also in focus. All these factors will provide deeper insight into the direction of the Fed's monetary policy.

Impact of US CPI Inflation on Bitcoin and Crypto Markets

CPI data due later in the day is expected to show U.S. inflation eased to 0.3% in January from 0.4% in December. Annually, inflation is expected to come in at 2.8%, down from 2.9% previously. Meanwhile, core CPI inflation, which excludes food and energy prices, is expected to hold steady at 0.3% on a monthly basis and ease to 3.1% from 3.2% on an annual basis.

If inflation figures are lower than expected, the Fed could potentially adopt a more dovish monetary policy, which would support Bitcoin prices and the crypto market as a whole. Conversely, if inflation figures are higher than expected, the market could experience a selloff due to monetary policy uncertainty.

The data gained significance after the U.S. jobs report showed nonfarm payrolls increased by 143,000 in January, below market expectations of 169,000. The slowdown added to expectations that the Fed will consider easing policy sooner rather than later.

Other Important Economic Events

In addition to CPI, the market is also looking forward to the US PPI data to be released on February 13. PPI is expected to increase by 0.3% in January, up from 0.2% in the previous month. Changes in PPI can affect inflation expectations and the Fed's interest rate policy, which in turn impacts the crypto market.

On the other hand, the testimony of Fed Chairman Jerome Powell is also an important agenda this week. Powell is scheduled to speak before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Powell's remarks could provide a clearer signal about the future course of monetary policy, especially after the Fed kept interest rates unchanged in January.

What is the Future Prospect of the Crypto Market?

With a slew of economic data due, the short-term direction of the crypto market still depends on the CPI inflation results and the Fed’s response. If inflation is lower than expected, investors may be more willing to take risks, pushing Bitcoin and other crypto prices higher.

However, volatility is still a major factor. If inflation remains high or the Fed signals a hawkish stance, a sell-off in the market could occur. Some analysts even predict that Bitcoin could fall to $90,000 before continuing its uptrend and hitting a new record high.

Overall, this week will be a crucial period for the crypto market. Investors will be watching every major economic event to get a clearer picture of the outlook for US monetary policy and its impact on digital assets.