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Highlights
- Crypto markets remained subdued ahead of the scheduled CPI data release.
- XRP bucks the trend with a small surge while Bitcoin and other altcoins remain largely subdued.
- Hot CPI could stall Fed rate cut hopes and rattle crypto market but a cooler print may fuel massive rally.
The financial markets in the US were in the doldrums in April when positive Consumer Price Index (CPI) data boosted sentiments. The markets have roared back ever since with one good news after another on the Tariff front, with the US striking crucial deals with major economies like the UK and China. Ahead of the US CPI release today, the crypto market is again on the edge as most predictions seem clouded.
Today, ahead of the release of data indicating the health of our economy, Bitcoin seemed to have caught a cold foot. Following a sharp rise yesterday peaking at $105K, BTC price slumped back to $101.6K last night, and is settling at around $103.4K now. Most other crypto assets, including ETH, SOL, DOGE, have all remained subdued. However, Ripple’s XRP has shown resilience and surged by almost 2%.
CPI Data’s Impact on Crypto
CPI is a key inflation metric that indicates how stable the economy is in terms of balancing growth and rising costs. The Federal Reserve closely watches CPI data to decide interest rate policy. After the Feds kept the rates steady earlier this month, much to the disappointment of the crypto community, a higher-than-expected CPI today will erase the hopes of a Fed rate cut even in June or July.
Such a scenario, though unlikely, could exert pressure on all risk assets, including crypto.
In March and April, softer CPI data helped Bitcoin reclaim momentum. The Bitcoin prices climbed steadily alongside rising institutional interest as the data suggested a potential rate cut later this year. The May reading, however, comes after a period of volatility triggered by hawkish Fed commentary and shifting rate cut timelines.
The US CPI data – May 2025 is scheduled today, May 13, 2025, at 8:30 AM Eastern Time.
Expectations and Market Sentiments
The US CPI expectations for today are that they will maintain a steady rate at 2.4% YoY for April. The month-over-month metric may exhibit some deviation at 0.3%, higher than the 0.1% decline seen in March. The US CPI inflation data will also reflect the initial impacts of the tariffs imposed by President Donald Trump in April on inflation.
According to reports, traders have already started trimming their positions in anticipation of today’s report. A deviation away from expected numbers can give a raw jolt to the crypto markets. A hot CPI report signaling persistent inflation can trigger a selloff, while a cooler print could revive rate cut bets, fueling a rally.
Today’s reading could be pivotal as Bitcoin flirts with #105K, and Ethereum attempts to reclaim $2,500. While expectations of a rate cut are already partially priced in, positive data could push Bitcoin to rally to a new all-time high.
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