Markets
Cryptocurrency Markets Drop Ahead of US CPI Data Release
The cryptocurrency market faced correction, with major assets falling, ahead of the release of US inflation data.
The U.S. Consumer Price Index (CPI) report for June this year is due out today at 8:30 a.m. ET (12:30 UTC). According to Investing.com analyst Jesse Cohen, most U.S. banks and investment firms expect the country’s inflation rate to fall slightly — between 3% and 3.2%.
🇺🇸🇺🇸 U.S. JUNE CPI INFLATION ESTIMATES
• TD BANK: 3.0%
•SCOTIABANK: 3.0%•JP MORGAN: 3.1%
•WELLS FARGO: 3.1%
•CITI: 3.1%
•BARCLAYS: 3.1%
•BNP PARIBAS: 3.1%
•NOMURA: 3.1%
•https://t.co/LOppBTC8mR: 3.1%•BANK OF AMERICA: 3.2%
•GOLDMAN SACHS: 3.2%•MORGAN STANLEY: 3.5%… photo.twitter.com/CY7EoNwXaz
— Jesse Cohen (@JesseCohenInv) July 10, 2024
On the other hand, investment banking firm Morgan Stanley estimates that June CPI will hit 3.5% year-over-year (YoY), according to Cohen’s X post.
If the inflation rate for June falls to around 3.1%, the analyst says that would increase the chances of a Fed rate cut in September. Cohen added in the X thread:
“Anything above 3.5% and you can forget about rate cuts in 2024.”
The inflation rate knocked down from 3.4% in April to 3.3% in May, crypto.news reported. Notably, this is the lowest level seen since April 2021. Consequently, the cryptocurrency market witnessed a market-wide recovery with Bitcoin (BTC) surpassing the $69,000 mark on June 12, the day the inflation report was released.
Historically, the cryptocurrency landscape has often faced rude corrections before the CPI report. However, it happened again.
The global cryptocurrency market cap has fallen by 1% over the past 24 hours and stands at $2.24 trillion at the time of reporting. Bitcoin is down by 2% and is hovering around $57,900.
A decline in the US inflation report could potentially suggest bullish momentum for the cryptocurrency sector and vice versa.