Market Overview
Crypto markets experienced a 3% dip in the last 24 hours as traders await the U.S. consumer price index (CPI) readings that will be announced on Wednesday. Some traders predict a slide in the dollar, possibly leading to a rise in crypto prices.
- Bitcoin (BTC) fell by 1.3%, while major cryptocurrencies like Ether (ETH), Solana (SOL), Cardano (ADA), and XRP declined by up to 3%.
- Dogecoin (DOGE) saw the most considerable drop with a 4.5% decline. Meanwhile, BNB from the BNB Chain rose by 1% due to renewed interest in its ecosystem.
Current CPI Outlook
The January CPI is expected to show a 0.3% increase month-on-month and a 12-month inflation rate of 2.9%, which will provide insights into whether the Federal Reserve intends to reduce interest rates in 2025 as a measure against rising prices.
Trade Predictions
Some analysts work under the assumption that a dollar unwind could be triggered by any signs of a rate cut. This could influence risk assets, allowing crypto investors to seize opportunities for higher pricing.
“We infer that the market is heavily long on the dollar. Given that negative news has likely been priced in, we believe USD now faces greater downside risk,” stated QCP Capital, based in Singapore, during a recent Telegram broadcast.
Translation: “We believe that the market is predominantly optimistic about the dollar. With most negative news already factored in, we think the dollar is liable to greater risk of decline.”
Moreover, QCP added that purchases of downside protection options remain a wise strategy in the current market conditions.
