With CPI reports due tomorrow and Bitcoin at a critical level, letโs break down how inflation influences Bitcoin. ๐งต๐งต
๐ What is CPI?
- CPI tracks the average price change over time for a basket of goods and services like food, housing, and more. ๐
- It's a key inflation indicator that can affect your walletโand even your Bitcoin. ๐ธ๐ธ
๐ง How Does CPI Work?
- Think of buying the same items each month: milk, bread, rent, etc. ๐ฅ๐๐
- If prices rise, CPI increases = inflation ๐
- If prices fall, CPI decreases = deflation ๐
๐ก Why Does CPI Affect Bitcoin?
- High CPI (inflation) may lead central banks to raise interest rates. ๐ฅ
- Higher rates can make traditional investments like bonds more attractive, drawing money away from riskier assets like Bitcoin. ๐ข
๐ How Should You Trade It?
- Major events like CPI often cause big market volatility. โก
- Bitcoin tends to sweep liquidity (highs/lows) and create choppy conditions. STAY PATIENT. ๐
- Let the chop and stop hunts happen, then identify the trend to trade more safely. ๐ฆ
๐ The Big Picture
- CPI and inflation trends can indicate Bitcoinโs potential price movements. ๐ฆ
- For example, rising CPI might lead to Bitcoinโs price dipping as investors look for safer options. ๐ผ
- Thankfully, CPI has been trending lower recentlyโhopefully, this continue.
