Crypto markets slipped 3% over the last 24 hours as dealers are waiting for US Consumer Price Index (CPI) readings expected later Wednesday, with some expecting a dollar light in a step that can beat crypto prices.
Bitcoin (BTC) lost 1.3%, while Majors Ether (ETH), Solana’s Sun, Cardanos ADA and XRP lost as much as 3%. Memecoin Dogecoin (DOGE) slid mostly with a 4.5% slide, while the BNB chain’s BNB had risen 1% in the middle of renewed interest in blockchain’s ecosystem.
The widely based Coindesk 20 (CD20), a fluid index that tracks the largest tokens after market capital, dropped 2.5%.
The US CPI measures the average change over time in the prices that urban consumers pay for a market basket with consumer goods and services. Changes in CPI readings tend to affect Bitcoin and the wider crypto market as investors consider the asset class a hedge against inflation.
The outlook for CPI in January calls for a monthly increase of 0.3% for all-elements index and a 12-month inflation of 2.9%, giving signals of whether Federal Reserve will reduce interest rates in 2025 to fight rising rising prices .
Some dealers expect a dollar to relax on any indications of a rate cut – which may strike risk assets and give a mail for cryptoinvestors who want to bet on higher prices.
“We emit that the market is very long on the dollar. Given that negative news has probably been priced in, we believe that the USD is now facing greater downward risk, ”Singapore-based QCP Capital said in a telegram that was broadcast on Wednesday.
“All positive news could force USD longing to relax their positions in a lot and potentially send risk assets higher. Tonight’s CPI release could be the catalyst that triggers a sharp move lower in DXY. “
“However, this rising tide may not lift all boats. Bitcoin continues to underpoint stocks and gold, which suggests some hesitation in the crypto community. Liquidity remains thin over the many new lists every week, and last week’s large liquidation wiped out many dealers, ”QCP said, referring to last Monday’s liquidation event of $ 1 billion
QCP Added purchase “Downward protection” or options that pay off as prices fall lower – remains the “best strategy” in the current environment.
