Overview of the Cryptocurrency Market Before the Release of US Inflation Data (CPI)

1. What is happening?

Digital markets, especially Bitcoin and altcoins, are experiencing notable volatility while awaiting the release of the Consumer Price Index (CPI) data in the United States at 3:30 PM Baghdad time. This data directly affects the Federal Reserve's decisions regarding interest rates, which strongly reflects on the performance of cryptocurrencies.

Current Market Performance

Bitcoin (BTC)

Currently trading at around $102,400 after retreating from its recent high of $105,700. This decline is attributed to profit-taking and caution ahead of the data.

Altcoins

Most have seen declines of up to 7%, except for XRP, which rose by more than 4%.

Inflation Data Expectations and Their Potential Impact

Expectations

Annual inflation (CPI) is expected to be 2.3%, compared to 2.4% in March, while core inflation (Core CPI) is expected to be at 2.8%.

Expected Market Reaction:

If the data comes in lower than expected: optimism for interest rate cuts will increase, potentially pushing Bitcoin to surpass $106,000 and possibly reach $110,000.

If the data is higher than expected: the market may decline due to reduced hopes for interest rate cuts.

Technical Analysis

Relative Strength Index (RSI)

There is positive divergence, indicating weakening selling pressure and the possibility of a bullish rebound.