Why is crypto down today? CPI anticipations may be one factor
The crypto ecosystem witnessed bearish sentiment ahead of the U.S. Consumer and Price Index (CPI) report while stocks closed a green day.
According to data provided by CoinGecko, the global crypto market cap declined by 2.1% in the past 24 hours and is sitting at $2.72 trillion at the time of writing. The total daily trading volume also recorded a 3% drop, hovering around the $112 billion mark.
Following the marketwide decline, the leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), slightly dipped after a short-term bullish momentum on April 9. BTC slipped by 2.6% in the past 24 hours and is trading at $68,900 at the time of writing.
ETH recorded a 3.3% fall over the past day and is trading at $3,510 at the reporting time.
The red market condition comes before the release of the U.S. CPI data for March 2024 — set for April 10 at 08:00 ET (12:00 UTC).
If the unveiled readings are exactly as projected, the chief analyst at Bitget Ryan Lee says, “it will amplify the likelihood of an interest rate cut in June as speculations regarding a Fed pivot are soaring.”
“While inflation is not really at the Federal Reserve’s preferred level of around 2%, the current reading is a significant improvement from the 10.6% recorded as of March 2023.”
Ryan Lee, the chief analyst at Bitget, told crypto.news.
Per an X post by Investing.com, the February CPI rate was at 3.2% and is expected to reach 3.4% in March.
Lee added this improvement has steered the speculation of a rate cut from the 5.25%-5.5% bank fund rate as early as June. He said:
“The speculations that are likely to grow in the coming months will stir volatility in markets and the uncertainty might test the resilience of many stocks. In all, investors will need to trust that the Fed knows what it is doing and things will work out for all stakeholders in the long term.”
On the other hand, the stock market witnessed a green day on April 9. The S&P 500, for example, surged by 0.14%, gaining 7.52 points, and is standing at 5,209.91.
It’s important to note that financial markets usually witness nervous conditions before the CPI data release when a higher inflation rate is expected.
