#RiskRewardRatio

THE U.S. CPI DATA WILL BE PUBLISHED

TODAY AT 8:30 AM ET.

EXPECTATIONS: 2.6%

HOW IT AFFECTS THE MARKET:

LOWER THAN EXPECTED CPI:

If the CPI data shows that inflation is lower than anticipated, it may signal that central banks, such as the U.S. Federal Reserve, could ease monetary tightening (for example, pause rate hikes or even cut rates). This typically boosts risk assets, including cryptocurrencies, as lower interest rates make borrowing cheaper and reduce the appeal of safe-haven assets like bonds. Investors may funnel money into Bitcoin and altcoins, anticipating a "risk-on" environment. For instance, a softer CPI could weaken the U.S. dollar, further supporting cryptocurrency prices since many cryptocurrencies are valued against it.

HIGHER THAN EXPECTED CPI:

Conversely, if the CPI turns out to be higher than expected, it suggests persistent inflation, which could lead central banks to raise interest rates or maintain an aggressive stance. Higher rates increase the cost of borrowing and make yield-generating assets, like bonds, more attractive, often leading to a mass sell-off of riskier assets like stocks and cryptocurrencies. This can cause Bitcoin and other cryptocurrency prices to drop in the short term as investors shift toward safer investments.