What to Expect for Bitcoin and Crypto Ahead of This Week's Inflation Data

💡 DMK Insight

January’s CPI release is looming large, and here’s why that matters: stronger jobs data has shifted rate expectations, creating volatility in both forex and crypto markets. Traders need to keep an eye on how the CPI figures align with the recent jobs report. If inflation continues to surprise on the upside, we could see the Fed leaning towards more aggressive rate hikes, which would likely strengthen the dollar and put pressure on risk assets like cryptocurrencies. Watch for key levels in the USD pairs; a break above recent highs could signal further strength. Conversely, if CPI comes in lower than expected, it might ease rate hike fears, providing a potential rally opportunity for crypto. But don’t overlook the flip side—if the CPI data is mixed, it could lead to choppy trading conditions. Institutions might react more cautiously, leading to increased volatility. Keep an eye on the 1.5% mark for CPI; that’s a critical threshold that could dictate market sentiment in the short term.