The cryptocurrency market might finally get a shake-up after the upcoming release of the CPI and PPI data this week. Chairman Powell will also deliver his semi-annual monetary policy testimony to the HFSC. With the 25bps rate cut looming on the horizon, things may change rapidly.
Inflation levels are evaluated using economic indicators such as the PPI and CPI, which have a direct impact on monetary policy decisions. A more aggressive stance on interest rates by the Federal Reserve in response to higher-than-expected inflation could have an impact on all financial markets, including cryptocurrencies.
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On the other hand, if inflation seems to be under control, the markets might feel some relief, and the price of digital assets might rise. The testimony of Chairman Powell is also a significant event because it provides information about the Federal Reserve's outlook for the economy and its plans for future monetary policy.
Increased volatility on the cryptocurrency market can be attributed to any sign of policy changes or shifts in the outlook for the economy. Investors and traders will be carefully observing any clues about interest rates and the Fed's strategy for combating inflation.
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There is additional uncertainty because of the possible rate cut of 25 basis points. It might indicate the Federal Reserve's intention to boost economic growth if it is put into practice, which could have a favorable impact on risk assets like cryptocurrencies. However, how these developments fit into current economic conditions and expectations will determine how the market responds in the main.
The cryptocurrency market is going through a turbulent time right now. With resistance at the 200 EMA level, Bitcoin has found it difficult to hold its position above $58,000. Ethereum is struggling to maintain its upward momentum and is currently trading below the $3,000 mark. Broader market forces, such as massive liquidations and selling pressure from different entities such as government agencies and ETF holders, are aggravating these technical difficulties.