How Can the Upcoming US Inflation Data Affect the Overall Crypto Community?

Crypto prices have been going through some major upheavals. As a result, the overall environment surrounding cryptos was slightly tense.

Crypto prices have been experiencing significant fluctuations, leading to a tense atmosphere within the crypto domain. Despite attempts at a price recovery, the overall scenario remains largely unchanged.

The crypto fear/greed index continues to indicate ‘Fear’, highlighting a tendency among a majority of investors to either sell their crypto holdings or postpone decisions to acquire new coins.

Currently, BTC price hovers around the $96,000 mark, while coins like XLM, IOTA, and other altcoins have witnessed substantial dips. For instance, IOTA has declined by 63% from its recent high of 2024, currently trading at $0.49.

In light of this, the market conditions can be described as unfavorable. However, a crucial question arises: how will the upcoming US inflation data impact the crypto community?

Upcoming CPI Data

A day of potential significance for crypto enthusiasts in the US will be February 12th, as the Consumer Price Index (CPI) data is set to be released.

Ahead of this event, a report by Reuters, citing economists, suggests that the headline CPI is likely to remain unchanged at 2.9%. However, the Core CPI is expected to rise to 3.2% for January.

According to sources, higher-than-expected inflation could put pressure on cryptocurrency tokens. In a worst-case scenario, it might trigger a bearish price movement, possibly leading to an even larger liquidation event compared to last week.

On the other hand, a lower figure could contribute to a rebound in prices.

Federal Reserve Chair Jerome Powell has stated, “With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust it.” He also mentioned that banks will keep a higher interest rate because of inflation.

Thus, it becomes evident that the fate of the crypto community largely hinges on the upcoming Consumer Price Index report on Wednesday. Cryptos like BTC, ETH, IOTA, Stellar, and other altcoins stand to be affected by the data. Stay tuned for more crypto news.