Could CPI expectations be contributing to today’s crypto decline?
The cryptocurrency ecosystem experienced a downturn in sentiment leading up to the release of the U.S. Consumer and Price Index (CPI) report, while stocks ended the day on a positive note.
According to data provided by CoinGecko, the global market cap for cryptocurrencies dropped by 2.1% in the past 24 hours, currently sitting at $2.72 trillion. The total daily trading volume also saw a 3% decrease, hovering around $112 billion.
Following this market-wide decline, the two leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), experienced a slight dip after a brief period of bullish momentum on April 9. BTC fell by 2.6% in the past 24 hours and is currently trading at $68,900.
ETH saw a 3.3% decrease over the past day and is currently trading at $3,510.
This decline in the market comes ahead of the release of the U.S. CPI data for March 2024, scheduled for April 10 at 08:00 ET (12:00 UTC).
If the reported numbers align with projections, Bitget’s chief analyst, Ryan Lee, believes it will increase the likelihood of an interest rate cut in June, as speculation about a Federal Reserve pivot grows.
According to a post on Investing.com, the CPI rate for February was 3.2% and is expected to reach 3.4% in March.
Lee also noted that this improvement has fueled speculation of a rate cut as early as June, bringing the bank fund rate down from 5.25% to 5.5%.
On the other hand, the stock market experienced a positive day on April 9. The S&P 500, for instance, saw a 0.14% surge, gaining 7.52 points and reaching 5,209.91.
It’s worth noting that financial markets typically experience nervous conditions before the release of CPI data, especially when a higher inflation rate is anticipated.
