Tonight at 8:30 PM, the fate of the cryptocurrency market may be rewritten!
At 8:30 PM tonight, the U.S. March CPI data is about to be released, and the global financial market is on high alert. This data is not only related to the direction of the U.S. economy but will also have a significant impact on the cryptocurrency market and U.S. stocks.
1. The Fed's Dilemma
Currently, the Federal Reserve faces a tough choice. Tariffs are putting economic pressure on the country, and lowering interest rates could hedge risks, which would be a significant boon for the cryptocurrency market, increasing market liquidity and attracting funds into the crypto space. However, there are still inflation issues in the U.S., and raising interest rates to curb inflation could lead to funds flowing back to traditional financial markets, causing a withdrawal of funds from the cryptocurrency market and a price drop.
2. Impact of CPI Data
1. Higher than expected: If the March CPI data is higher than expected, inflation fears will intensify, and the likelihood of the Federal Reserve raising interest rates will increase significantly. This would be negative for the cryptocurrency market, leading to capital outflows, and cryptocurrency prices are likely to fall. U.S. stocks would also drop due to concerns over economic prospects.
2. Lower than expected: If the data is lower than expected, it indicates that inflation is under control, increasing the likelihood of the Federal Reserve lowering interest rates. This would be favorable for the cryptocurrency market and U.S. stocks, attracting funds into the crypto market, causing prices to rebound, while U.S. stocks would rise due to improved economic outlook and expectations of rate cuts.
3. Underlying Factors
Recently, tariffs have caused American citizens to rush to buy goods, leading to an imbalance in market supply and demand, and rising prices, adding uncertainty to the CPI data. According to analysis, the probability of this CPI data exceeding expectations is 60%, presenting some downside risks for the cryptocurrency market and U.S. stocks, and investors need to closely monitor market dynamics and manage risks effectively. $BTC
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Tonight's US CPI Data Expectations and Impact on the Cryptocurrency Market
1. CPI Data Expectations - Overall CPI: - Year-on-year expected to drop from 2.8% to 2.6% (if realized, this would be the lowest since August 2024); - Month-on-month expected at 0.1%, mainly due to a decline in energy prices. - Core CPI (excluding energy and food): - Year-on-year expected at 3.0% (previous value 3.1%), month-on-month expected at 0.3%, reflecting a rebound in commodity prices (such as clothing and electronics) and resilience in service sector inflation.
2. Impact on the Cryptocurrency Market - If the data is below expectations (year-on-year ≤ 2.5%): - Positive: Expectations for a Fed rate cut may rise, Bitcoin could break the resistance level of $83,500, driving ETH and altcoins to follow. - If the data is above expectations (year-on-year ≥ 2.8%): - Negative: Expectations for a rate cut may cool, Bitcoin might retrace to the support level of $75,000.
3. Comprehensive Analysis - Likely neutral to slightly positive: The current market has partially digested the optimistic sentiment of tariff suspension (90 days), and if the CPI meets expectations or slightly declines, short-term fluctuations may continue to rise, but one should be cautious of the volatility risks brought by core inflation resilience. - On-chain signals: Binance's Bitcoin reserves surged (an increase of 22,106 BTC in 12 days), which may indicate that institutional entry or selling risks coexist, requiring judgement based on data results.
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If BTC breaks below $72,000, it may face greater downside risks
The price of Bitcoin has fallen below two important support levels, namely around $93,000 and $87,000, and has previously dipped to $76,000. These levels are typically viewed as significant support for the market, and the current breach may indicate a shift in market sentiment.
The cost price for short-term holders is around $93,000, and the Bitcoin price is currently fluctuating between $87,000 and $73,000, but is close to testing the lower limit of $72,000. If it breaks below this level, it could undermine the confidence of short-term investors and lead to further price declines.
Additionally, there are deeper support zones around $65,000 and $71,000 for Bitcoin, but these levels are in low liquidity areas. If the price falls into this range, it could trigger significant volatility while attracting long-term investors to buy the dip.
Come to the Section Chief's Chat Room at 20:30 tonight for the final showdown with CPI In the evening, let's see if there’s potential in the Tian Di Needle, I will share the Tian Di Needle points in the chat room!
If you haven't entered the chat room yet, just click the link below to join the chat room! 进科长聊天室,分享最新行情观点
🌐 Machine Learning Reveals How High Shiba Inu Price Will Rally In April, Here’s The Target 🚀 $SHIB Leading on-chain metrics and price prediction firm has published a bullish forecast for Shiba Inu (SHIB) in April 2025.