The crypto market is bracing for the upcoming US Consumer Price Index (CPI) inflation data, which could significantly impact the Federal Reserve’s rate cut plans. The recent US job data, which indicated a cooling labor market, has fueled market optimism and sparked hopes of a potential rate cut. Notably, Bitcoin briefly surpassed the $100,000 mark following the job data release, reflecting the market’s positive sentiment.
Now, the market watchers eagerly await the crucial events this week, which could provide further clarity on the Fed’s future monetary policy decisions.
Crypto Market Enters Crucial Week
Investors are eyeing major economic developments as the crypto market enters a crucial week. A flurry of developments is scheduled for this week, including inflation indicators like the US CPI, US PPI, and others. Besides, Fed Chair Jerome Powell’s testimony to Congress will also be watched closely for the central bank’s stance on Fed rate cut plans.
US CPI Inflation & Its Impact On Bitcoin & Broader Crypto Market
The highly anticipated US Consumer Price Index (CPI) data is scheduled for this week, which is likely to influence the broader crypto market trend, including Bitcoin. According to the Wall Street predictions, the US CPI inflation is expected to cool down to 0.3% for January, down from 0.4% in December. On a year-over-year basis, the CPI is expected to come in at 2.8%, down from 2.9% previously.
On the other hand, the Core CPI inflation, excluding food and energy prices, is expected to remain unchanged at 0.3%. However, the year-over-year Core CPI is expected to cool down to 3.1% from 3.2% in the prior month.
Meanwhile, this data is crucial for the Federal Reserve’s interest rate decisions, which in turn impacts the crypto market. A lower inflation rate could lead to a more dovish stance by the Fed, potentially benefiting Bitcoin and the broader crypto market.
Having said that, this data will be closely watched by the investors, especially after the recent US Job data gave some relief to the investors. Notably, the latest Labor market data showed that the nonfarm payrolls came in lower than the market expectations of 169,000 and increased by 143,000 in January.
Other Key Events To Watch
Apart from the CPI figures, the market is also waiting for the US Producer Price Index (PPI) figures. It is another key metric that the US Fed evaluates while deciding its policy rate plans. The PPI inflation data is scheduled for Thursday, February 13.
According to market estimates, the US PPI is likely to advance at 0.3% for January, up from 0.2% noted in the previous month. Having said that, it could impact the market sentiment, as the Fed officials have previously revealed a hawkish outlook with their rate cut plans.
Meanwhile, another key event this week is Fed Chair Jerome Powell’s testimony, especially after the Federal Reserve’s latest report to Congress strikes an optimistic tone on the US economy, citing growth. However, it also flags concerns over financial system stability, sounding caution amid ongoing monetary policy debates and market volatility.
Notably, the Federal Reserve Chairman is set to testify before Congress this week, marking his first appearance since July. Powell will face the Senate Banking Committee on Tuesday and the House Financial Services panel on Wednesday.
Market participants will closely watch his testimony, as it may provide clues on the Fed’s future interest rate decisions. The Fed’s recent decision to hold rates steady in January has sparked interest in Powell’s perspective on future rate cuts. Considering that, his testimony may impact the crypto market and broader financial sector, as investors seek guidance on the Fed’s monetary policy stance.
What’s Next For Crypto Market And Bitcoin?
The economic indicators and the Fed Chair’s testimony will play a key role in shaping the market sentiment ahead. Although the recent US job data gave some relief, the focus now shifts to the inflationary indicators. Having said that, if the inflation comes in hotter than expected, it could trigger a potential selloff in the broader financial sector, let alone the crypto market.
Besides, the ongoing market volatility has already forced many investors to stay on the sidelines. However, despite that, it appears that the market analysts remain optimistic about the future trajectory of the coin. For context, top experts have recently predicted a potential Bitcoin price pullback to $90,000 before reversing track to hit a new ATH.
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