How Will Crypto Markets React to July 12 CPI Report?

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Seasoned crypto trader Matthew Dixon recently shared his thoughts on the upcoming Consumer Price Index (CPI) data release and how it could potentially influence the cryptocurrency market.

Dixon predicts that if inflation declines as expected, it could trigger an optimistic response from risky assets such as Bitcoin (BTC), Ethereum (ETH), XRP and other altcoins.

Crypto Market Forecast

Known for his accurate market forecasts, Matthew Dixon drew attention to the impending release of CPI data for July. Based on the trends shown in the June data, the expectation is for inflation to fall.

In June, core inflation stood at 5%, while the general inflation rate was marked at 3.1%. Dixon believes that a decrease in these numbers could positively influence the crypto market and potentially elevate the currently bearish sentiment.

Read more: Bitcoin price prediction next week: Will US CPI push BTC price above $31,500 or dip below $30,000?

The CPI in the United States provides an overall assessment of the average changes in the prices paid by urban consumers for a specific basket of tradable goods. This basket includes food, representing 14% of the total weight, energy at 8%, and raw materials excluding food and energy contributing 21%.

Impact on interest rates

Despite recent signs of a cooling labor market, which remained robust according to the June report, many believe the CPI results are likely to have minimal impact on the Federal Reserve’s interest rate path.

However, the crypto market remains sensitive to macroeconomic indicators. Currently, the global crypto market is experiencing a slowdown, with a decline of 0.8% in the last 24 hours. Notably, Bitcoin, Ethereum, BNB, XRP, Cardano, and Dogecoin are all experiencing declines. Nonetheless, Bitcoin continues to hold its own, holding a value above $30,000, while Ethereum lingers around $1,850.

Hope for positivity

If Dixons’ CPI predictions turn out to be correct, the crypto market could see a flurry of positive responses. Lower inflation would present a healthier economic outlook, potentially luring investors into riskier assets like cryptocurrencies.

This could be the catalyst needed for the crypto market to break free from its current downtrend and move back up again.

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