- Upcoming US economic data will trigger volatility in the crypto market this week.
- CPI and Core CPI indicators determine the Fed’s decision on interest rates.
- The crypto market surged significantly last week as Bitcoin achieved a new record.
The crypto market surged significantly last week as Bitcoin achieved a new all-time high while most top altcoins returned massive gains. However, upcoming economic data due in the US by early next week could affect the market conditions. Most analysts expect increased volatility in the crypto market to follow the outcome of US economic reports.
Top among the economic indicators expected this coming Tuesday are the US CPI and Core CPI data. For context, the US CPI provides data about the change in the price of goods and services purchased by consumers over a specific period. It differs from the Core CPI, which covers the change in price of goods and services, excluding food and energy.
Related: Analyst Forecasts Imminent “Altseason” Fueled by Key US CPI Data and Bitcoin Strength
Notably, the CPI and Core CPI data, which reflect consumer prices, account for the majority of overall inflation, which in turn is a crucial indicator for currency valuation. It is worth knowing that the Federal Reserve relies on these indicators to make interest rate decisions for its inflation containment mandate.
Typically, an ‘actual’ CPI or Core CPI figure greater than what the ‘forecast’ says favors the local currency, in this case, the US dollar. Hence, economic analysts are focusing on the 0.3% forecast for both the CPI and Core CPI indicators to predict the short-term direction of the markets.
Meanwhile, it is crucial to note that the outcomes of these figures do not always determine the market direction. Investors and analysts also focus on the reports from the Fed’s executives to ascertain whether they portray a hawkish or dovish outlook for the markets in the short to medium term. These events accumulate to trigger reactions from traders and investors, leading to increased market volatility.
Related: Upcoming US CPI Report to Test Fed Rate Cut Hopes After Strong Jobs Data
Altcoin bulls are hopeful that the outcome of this week’s economic events will support the rediscovered bullish sentiment and boost crypto prices. Such an outcome could trigger another rally phase that could see some top altcoins like ETH and XRP continue to surge and pursue record prices.
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