Markets
Cryptocurrency Market Crashes Ahead of US CPI Data Release
The cryptocurrency market has undergone a correction, with major assets declining ahead of the release of US inflation data.
The US Consumer Price Index (CPI) report for June this year is due out today at 8:30 a.m. ET (12:30 UTC). According to Investing.com analyst Jesse Cohen, most US banks and investment firms expect the country’s inflation rate to decline slightly, between 3% and 3.2%.
🇺🇸🇺🇸 US CPI INFLATION ESTIMATES FOR JUNE
•TD BANK: 3.0%
•SCOTIABANCO: 3.0%•JP MORGAN: 3.1%
•WELLS FARGO: 3.1%
•CITI: 3.1%
• BARCLAYS: 3.1%
•BNP PARIBAS: 3.1%
•NOMURA: 3.1%
•Italian: https://t.co/LOppBTC8mR: 3.1%•BANK OF AMERICA: 3.2%
•GOLDMAN-SACHS: 3.2%•MORGAN STANLEY: 3.5%… photo.twitter.com/CY7EoNwXaz
— Jesse Cohen (@JesseCohenInv) July 10, 2024
On the other hand, investment banking firm Morgan Stanley estimates that the June consumer price index will reach 3.5% on an annual basis (YoY), according to Cohen’s post X.
If the June inflation rate falls to around 3.1%, the analyst says that would increase the chances of a Fed rate cut in September. Cohen added in thread X:
“Anything above 3.5% and you can forget about rate cuts in 2024.”
The inflation rate fallen from 3.4% in April to 3.3% in May, crypto.news reported. Notably, this is the lowest level seen since April 2021. As a result, the cryptocurrency market witnessed a market-wide rebound with Bitcoin (BTC) surpassing the $69,000 mark on June 12, the day the inflation report was released.
Historically, the cryptocurrency scene has usually had to deal with bearish corrections before the CPI report. However, it happened again.
The global cryptocurrency market cap has fallen 1% over the past 24 hours and stands at $2.24 trillion at the time of the report. Bitcoin has slipped 2% and is hovering around $57,900.
A drop in the US inflation report could potentially signal a market-wide bullish trend for the cryptocurrency sector and vice versa.