Key takeaways
- Bitcoin and Ether Prices Fall as US Dollar Strengthens Ahead of Inflation Data.
- The Fed could focus more on supporting the labor market instead of prioritizing inflation control.
Share this article
The total crypto market cap fell more than 3% to $2.2 trillion in the past 24 hours as investors await the next US inflation report, due in less than two hours, according to data from CoinGecko.
However, Bitcoin prices remained stable above the $60,500 level in the hours leading up to the key event. Bitcoin had a volatile day on Wednesday, falling below $62,000 before recovering to trade around $60,800 at the time of writing, according to CoinGecko.
Similar to Bitcoin, Ethereum saw a loss of over 2% in the past 24 hours, currently hovering around the $2,400 mark with further declines in sight. Unlike the volatile prices of Bitcoin and Ethereum, the US dollar strengthened ahead of the September CPI report.
Bearish sentiment prevails in the crypto market, with Aptos (APT), Near Protocol (NEAR), dogwifhat (WIF), and Optimism (OP) among the assets hit hardest over the past 24 hours. APT fell 9.5%, while NEAR, WIF and OP each fell 6%.
The next CPI data is expected to show an increase of 2.3% year-on-year, up from 2.5% in August 2024. The CPI is expected to increase 0.1% month-on-month, while The core CPI, which excludes food and energy prices, is expected to increase by 0.2%.
A deviation from the expected inflation report could lead to increased market volatility and influence the Fed’s rate decisions. If the report shows inflation rising more than expected, it could raise concerns that the Fed will need to adjust interest rates, increasing volatility in financial markets.
Although the Fed’s monetary policy is influenced by inflation data, its latest decision, which lowered interest rates by 50 basis points, indicates a response to deteriorating working conditions rather than focus only on inflationary concerns.
Analysts note that the Fed has become increasingly concerned about a weak labor market, as job opportunities have declined and unemployment has gradually increased.
Analysts say shifting the Fed’s primary focus from inflation to the health of the labor market could reduce the impact of inflation data on the market. However, some volatility could result from the CPI reports.
Share this article
