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US CPI and Core CPI Estimates By Wall Street Signals Crypto Market Recovery

Published

7 months ago

June 12, 2024

Coin2049 Newsletter

Crypto traders await cues from the latest US Consumer Price Index (CPI) and core CPI data to determine whether it’s time for Bitcoin to hit a new all-time high or concerns still prevail. The U.S. Bureau of Labor Statistics will release CPI inflation data for May hours before the US Federal Reserve’s interest rate decision on Wednesday, June 12. The data is crucial after a higher-than-expected US jobs data last week that scaled back bets on Fed rate cuts.

Wall Street giants including JPMorgan, Bank of America, Goldman Sachs, Morgan Stanley, Citigroup, UBS, Nomura, RBC, and Barclays estimate CPI to come in line at 3.4%. Meanwhile, BNP Paribas, TD Bank, and Wells Fargo forecast CPI inflation cooling to 3.3%.

As per economists, the annual CPI inflation to come in line at 3.4%, similar to last month. The monthly rate seen slowing to 0.1% from 0.3% last month. Also, the annual Core CPI is expected to fall to 3.5% from 3.6% last month and month-on-month core inflation to hold steady at 0.3%, after a major drop last month.

Both inflation data estimates by Wall Street and economists signal an overall positive numbers and sentiment for an uptick in the market. US stock futures steadied today as investors braced for double macro event of CPI and FOMC. Meanwhile, China announced its inflation rate falling below estimates.

Bitcoin Traders Eyes Fed Rate Cuts in September

Banks have predicted Fed rate cuts starting in September. A cooling CPI inflation and PCE inflation to confirm September as an official pivot by the Fed. Meanwhile, Fed Chair Jerome Powell remains bullish on the state of the US economy, still expecting three rate cuts, despite two indicated by Fed swaps.

The US dollar index (DXY) dropped ahead of CPI and Fed rate decision. It’s moving around 105.22, likely to drop below 105 after the key macro events. CPI in line with market estimates could raise bets for a rate cut in September, potentially lifting Bitcoin price.

Moreover, US 10-Year Treasury yields (US10Y) pared gains this week amid positive sentiment for market recovery, fading concerns raised after last week’s jobs data. Bitcoin price moves in the opposite direction to the US treasury yields and traders eyeing a further drop with slowing monetary policy tightening.

Also Read: Why The World’s Largest Bank Called Ethereum (ETH) Digital Oil

Bitcoin Price Rebound Post CPI To Bring Crypto Market Recovery

Bitcoin tends to dump into FOMC and CPI as the crypto market overreacts, which should reverse after these events. BTC price is creating a healthy market structure on the bigger timeframe and a buy-the-dip opportunity, said analysts. It has formed an inverse head and shoulders pattern in the lower timeframe, which could bring a recovery in the broader crypto market as BTC rises.

Open interests are increasing once again to hit all-time highs, but met a rough patch due to macro events. Total BTC futures open interest is at $35.47 billion, with fresh hints of buying from the bottom, as per Coinglass data.

Options market data indicate a rebound above $67,500 today and to surpass $69,000 on expiry day on Friday. Options traders have bet Bitcoin to hit highs of $75K and even $80K by the end of June. Traders are bullish after this heavy macro week, as per Deribit.

Meanwhile, spot Bitcoin ETFs saw a $200 million outflow amid macro concerns. Fidelity, Bitwise, ARK 21Shares, VanEck, and GBTC Bitcoin ETFs recorded outflows on Tuesday.

BTC price is trading at $67,265, down 0.57% in the last 24 hours. The support level is at $66K, a drop below this will negate the bullish scenario in the short term. Furthermore, the trading volume has increased slightly in the last 24 hours, indicating a rise in interest among traders.

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