Experienced cryptocurrency trader Matthew Dixon recently shared his prospects about the upcoming publication of the Consumer Price Index (CPI) data and its possible implications for the cryptocurrency market.
Dixon anticipates that if inflation declines as anticipated, this could trigger an upbeat response from risk assets like Bitcoin (BTC), Ethereum (ETH), XRP, and other altcoins.
Dixon, known for his accurate market forecasts, drew attention to the impending release of CPI data for July. The expectation, based on the trends shown in the June data, is that inflation will drop.
Core inflation for June stood at 5%, with the headline inflation rate set at 3.1%. Dixon believes that if these numbers decline, the crypto market may react favorably, which could improve the current bearish mood.
The CPI for the United States provides a general assessment of the average changes in prices paid by urban consumers for a specific basket of market goods. The components of this basket include food, which represents 14% of the total weight, energy with 8%, and basic products without food or energy that contribute 21%.
Economic Outlook and Crypto Market
The labor market has recently shown signs of cooling, despite remaining strong, as the June report shows. Many believe the results, whatever their implications, are likely to have minimal impact on the Fed’s interest rate course.
Despite this, the crypto market remains sensitive to macroeconomic indicators. As of now, the global crypto market is experiencing a downturn, having fallen 0.8% in the last 24 hours. In particular, Bitcoin, Ethereum, BNB, XRP, Cardano, and Dogecoin are all experiencing a downturn. Despite this, Bitcoin continues to hold strong, holding a value above $30,000, with Ethereum hovering around $1,850.
If Dixon’s CPI predictions prove accurate, the crypto market could see a wave of positive responses. A reduction in inflation would paint a healthier economic picture, which could entice investors to delve back into riskier assets such as cryptocurrencies. If this happens, it could be the spark the crypto market needs to break free of its current downtrend and move higher once more.
This post How will the Crypto Market react to the July 12 CPI report?
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