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Bitcoin (BTC) price showed volatility ahead of tomorrow's US Consumer Price Index (CPI) report. According to CoinGecko data, after rising above $72,000 earlier this week, Bitcoin fell back to below $68,500 on Tuesday. At press time, BTC is trading at around $68,800, down 4% in the last 24 hours.
The CPI report due on Wednesday is expected to have a significant impact on Federal Reserve policy, particularly regarding interest rates. Last month's CPI inflation was reported at 3.2%, with core CPI at 3.8%. Forecasts for the coming data are for a CPI of 3.5% and a core CPI of 3.7%.
The CME FedWatch Tool estimates that the probability that the Fed will keep interest rates between 525 and 550 basis points at the next FOMC meeting in May is 97.3%, and the probability of a rate cut is just 2.7%.
Despite the current uncertainty, the market is very likely expecting interest rate cuts from July.
July target price
December target price
Economists polled by Reuters expect the consumer price index to rise 3.4% from a year earlier, reflecting a slight decline in inflation and moving closer to the Fed's target.
Last week, Fed Chairman Jerome Powell stressed that the Fed needed more evidence that inflation was falling before cutting interest rates. Other Fed officials also expressed a preference for a more cautious and strict approach to monetary easing.
Bitcoin's fading momentum is shaking the crypto market and sending most altcoins into correction mode. According to CoinGecko data, after rising 8% on Monday, Ethereum (ETH) gave up those gains and fell 4.5% in the last 24 hours.
However, not all coins follow this example. The Open Network (TON) and Fantom (FTM) bucked the trend and rose 8% each today.
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