July CPI widely expected at 2.8% year-on-year.Fresh data could affect the Federal Reserve\u2019s rate cut plans and asset prices.Analysts anticipate Bitcoin to hit $200,000 in 2025.<\/p>\n
Markets are on high alert ahead of US inflation data set to be released on Tuesday, which could set the stage for crypto\u2019s next rally.<\/p>\n
That\u2019s according to Alice Liu, head of research at CoinMarketCap, who said that the Consumer Price Index, or CPI, could \u201clock in expectations for a September Fed rate cut, which is generally bullish risk-on assets like crypto.\u201d<\/p>\n
Low rates usually incentivises investors to tap into riskier bets like digital assets.<\/p>\n
The CPI figures \u201ccould potentially trigger Bitcoin\u2019s next all-time high,\u201d Liu said in comments shared with DL News. <\/p>\n
The new data comes as Bitcoin trades around $118,500 after surging past $122,000 over the weekend, reversing last week\u2019s losses, with Ethereum gaining over 20% in the same period. <\/p>\n
The US Bureau of Labor Statistics publishes the CPI figures every month. It is a key economic metric closely followed by policymakers, businesses, and markets, and is seen as one of the most important macro events this month for both Wall Street and digital assets. <\/p>\n
A lower CPI figure could solidify expectations for the Federal Reserve to cut interest rates in September while a hotter inflation read may hit Fed rate cut chances and weigh on crypto markets.<\/p>\n
The new numbers are \u201cpoised to be one of the most critical macro data releases in recent memory for risk assets,\u201d analysts at Presto Labs wrote in a Tuesday note<\/a> to investors.<\/p>\n Several analysts have said they anticipate that crypto prices will soon hit record highs. <\/p>\n Bitwise, Bernstein and Standard Chartered have all predicted<\/a> that Bitcoin\u2019s price will hit $200,000 before the end of the year. <\/p>\n Even so, Liu notes that Bitcoin and Ethereum options trades have surged to \u201cnear yearly highs\u201d of $43 billion and $14 billion respectively. <\/p>\n \u201cThis high open interest from derivatives traders could amplify volatility, so be cautious of short squeezes, sudden liquidations, or sharp price moves,\u201d Liu said.<\/p>\n The Fed has held its benchmark rate at 4.25%\u20134.50% all year. Markets are pricing an 84.4% chance of a September cut, according to the CME FedWatch tool. <\/a>That\u2019s up from the beginning of August when traders put the chances at 40%<\/a>.<\/p>\n