“Why has cryptocurrency declined today? Speculation surrounding CPI could be a contributing factor.”
The crypto industry experienced a bearish sentiment ahead of the release of the U.S. Consumer and Price Index (CPI) report, while the stock market had a positive day.
According to data from CoinGecko, the global crypto market cap dropped by 2.1% in the last 24 hours and currently sits at $2.72 trillion. The total daily trading volume also saw a 3% decrease, hovering around $112 billion.
As a result of the marketwide decline, the leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), experienced slight dips after a brief period of bullish momentum on April 9. BTC fell by 2.6% in the last 24 hours and is currently trading at $68,900.
ETH also saw a 3.3% decrease over the past day and is trading at $3,510.
The 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 readings align with the projections, Bitget’s chief analyst, Ryan Lee, believes it will increase the likelihood of an interest rate cut in June, as speculation about a potential shift in the Federal Reserve’s stance grows.
According to Investing.com, the February CPI rate stood at 3.2% and is expected to reach 3.4% in March.
Lee also noted that this improvement has fueled speculation of an early rate cut, possibly as soon as June, from the current bank fund rate of 5.25%-5.5%.
On the other hand, the stock market experienced a positive day on April 9. For instance, the S&P 500 surged by 0.14%, gaining 7.52 points and reaching 5,209.91.
It’s worth noting that financial markets often experience nervousness before the release of CPI data, especially when a higher inflation rate is anticipated.
