With CPI reports coming out tomorrow and Bitcoin at a key level, let me break down the influence inflation has on Bitcoin for you.
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Wait.. What is CPI though?
- CPI measures the average change in prices over time for a basket of goods and services, like food, housing, and more. 📊
- It's a key indicator of inflation, which can impact your wallet—and even your Bitcoin stash. 💸💸
How does CPI work?
- Imagine you're buying the same items every month: milk, bread, rent, and a few others. 🥛🍞🏠
- If prices go up, CPI rises = inflation 📈
- If they drop, CPI falls = deflation 📉
Ok.. So why does it affect Bitcoin?
- When CPI shows high inflation, central banks might raise interest rates to cool things down. 🔥
- This can make traditional investments like bonds more attractive, pulling money away from risky assets like Bitcoin 😢
How should you trade it?
- Big news like CPI often brings in big volatility. ⚡
- Bitcoin often sweeps liquidity (highs/lows) and chops to stop all traders out. So STAY PATIENT. 😌
- Let the chop and hunts happen, then see where price is trying to go to stay safer. 🚦
The Big Picture
- CPI and inflation trends can give you an idea of Bitcoin's price wings. 🦅
- For example, if CPI is rising fast, you might see Bitcoin’s price dip as investors seek safer options in the long run. 💼
- Thankfully, CPI has been trending lower. Hopefully, it continues. 📉
