Crypto Market Awaits US CPI: 5 Things To Expect this Week

Key Highlights:

• Crypto market awaits US CPI data to gauge inflationary pressure and the Fed’s next move.
• US CPI is expected to come in at 2.3%, down from 2.4% in March.
• Bitcoin price has touched $105,700, but investors appear to be taking a pause ahead of big events this week.

The crypto market investors await crucial events this week as bulls take rein amid easing macroeconomic tensions. A flurry of key events, including the US Consumer Price Index (CPI) and Producer Price Index (PPI), are scheduled this week, which would shed light on the current inflationary pressure on the economy. 

Besides, the Fed officials are expected to provide updates on the economic condition, which could offer clues about potential future actions, specifically regarding their rate cut plans. The market watchers will keep close track of these indicators, as they might shape the future movements of the broader financial sector, let alone the crypto market.

US CPI: How Can It Impact The Crypto Market?

Bitcoin has been one of the favorite bets in recent days, as more traders have started to embrace the digital assets space. In fact, it appears that the crypto market moves in tandem with the traditional stock market, sometimes even outpacing the Nasdaq or S&P 500.

Having said that, the major economic events tend to impact the investors’ sentiment, which in turn also influences the broader crypto market performance. Having said that, the digital asset space eagerly awaits the upcoming US CPI data, followed by the PPI figures. 

Notably, the US Federal Reserve also closely tracks these metrics to gauge the inflationary pressure in the economy. So, here we explore what to expect from the upcoming US CPI & PPI figures.

US CPI & PPI Release: What To Expect?

The US CPI data is scheduled for Tuesday, May 13, which might offer more insights on the central bank’s potential move with their rate cut plans ahead. According to Wall Street expectations, the CPI is likely to come in at 2.3%, down from 2.4% in March.

On a monthly basis, the inflation is expected to spike to 0.2% from a slump of 0.1% recorded in the prior month. Simultaneously, the Core CPI, which excludes the food and energy prices, is likely to come in at 0.3% for April, up from 0.1% in March. On a year-over-year (YoY) basis, the Core CPI is anticipated to remain unchanged at 2.8%.

Another key event, the US PPI inflation data, is scheduled for Thursday, May 15. Wall Street is expecting both the PPI and Core PPI to come in at 0.3%, up from the prior month’s figure of -0.4% and -0.1%, respectively.

What Does It Mean For The Crypto Market?

As said, these figures might influence the broader financial sector alongside the crypto market. Notably, the bulls are currently dominating the market, but it appears that the investors are taking a pause this week ahead of the crucial data.

However, the CME FedWatch Tool showed that the central bank is unlikely to change its policy rates at its upcoming meeting in June. Besides, the Fed has kept the rates unchanged at their last meeting this month, citing global trade war tensions.

Despite that, if the inflationary figures come in cooler-than-expected, it might help ease the interest rate tensions, which would give more space to the Fed to start trimming the rates.

Meanwhile, the digital assets space has recorded a massive surge recently, with the market cap of the space soaring to $3.37 trillion from $2.9 trillion recorded at the start of the month. 

Bitcoin price has touched a high of $105,747 in the last 24 hours, the highest since January end. Besides, recent reports indicate that BTC may hit $500K this cycle, which have further renewed market hopes.

Having said that, it appears that the market sentiment is currently bullish. Besides, the easing of US-China tariff tensions has further bolstered the market sentiment, which might fuel the ongoing rally in the coming days.