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Today, the core inflation data is set to be released, with the expectation of a slight decrease from 5.6% to 5.5%. If this anticipated reduction materializes, it could further weaken the U.S. Dollar Index (DXY) while providing a boost to the cryptocurrency market.
Bitcoin’s Price Scenarios Based on CPI Data
The CPI figures have a significant impact on Bitcoin’s valuation, which currently stands at $27,584. Market analysts from JPMorgan have proposed several scenarios based on the possible CPI results, estimating the potential effect on Bitcoin’s price. The probabilities and price predictions are as follows:
- If the CPI is above 5.5%, Bitcoin could drop to $25,000, with a 4% probability of this scenario occurring.
- A CPI range between 5.3% and 5.5% could result in Bitcoin’s value reaching $26,500, with a 25% chance of this happening.
- Should the CPI fall between 5.0% and 5.2%, Bitcoin’s price might increase to $28,500, which has a 50% probability according to JPMorgan’s estimations.
- A CPI ranging from 4.7% to 4.9% may cause Bitcoin to reach $29,000, with a 20% likelihood of this scenario.
- Lastly, if the CPI is 4.5% or lower, Bitcoin could potentially skyrocket to over $30,000. However, there is only a 1% chance of this happening.
How the CPI Affects Cryptocurrency Markets
The Consumer Price Index is a crucial economic indicator that measures the rate at which the prices of consumer goods and services change over time. It affects various markets, including foreign exchange and commodities, as well as cryptocurrency.
With the ongoing economic uncertainties and inflation concerns, investors are keeping a close eye on the CPI data. As inflation rises, traditional fiat currencies lose purchasing power, making alternative investments like Bitcoin more attractive to investors seeking to hedge against inflation.
Source: https://coinpedia.org/bitcoin/bitcoin-news-bullish-or-bearish-how-will-btc-price-react-to-cpi-reports-today/