tl;dr
The focus of market participants is on the upcoming US CPI inflation data, leading to muted trading in the financial sector and a slump in the crypto market. Big banks anticipate higher-than-expected inflation figures, potentially impacting investor sentiment and the US Federal Reserve's monetary po...
Market participants are focusing on the upcoming US CPI inflation data, leading to muted trading in the financial sector and a slump in the crypto market. Big banks anticipate higher-than-expected inflation figures, potentially impacting investor sentiment and the US Federal Reserve's monetary policy. Despite concerns, market experts remain optimistic about a potential rally in the crypto market, supported by pro-crypto sentiment and forecasts for a recovery in digital assets. The upcoming US CPI inflation figures and Fed officials' remarks will be closely monitored for market cues.
The market participants are shifting their focus towards the upcoming US CPI inflation data, as noted by recent muted trading in the broader financial sector. The crypto market also witnessed a slump, with Bitcoin, altcoins, and meme coins taking a hit. Estimates from big banks indicate a hotter-than-expected inflation figure, likely weighing on investor sentiment and sparking discussions about the US Federal Reserve's potential dovish plan.
Investors are awaiting the crucial US CPI inflation release by the Labor Department, with muted trading observed in the digital assets space and a decline in the global crypto market cap to $2.89 trillion. It is anticipated that the CPI figures will come in hotter than expected, with various big banks providing estimates ranging from 2.4% to 2.6% for the year-over-year CPI, potentially impacting the US Fed's monetary policy decision. The expected inflation may influence the central bank's plan for their December gathering, following the 25 bps rate cut announced at their November FOMC.
Despite the anticipated hotter-than-expected US CPI inflation, the market is still expecting another Fed rate cut in December, with a 62% probability indicated by the CME FedWatch Tool. Concerns have arisen regarding the potential impact on the robust rally in the crypto market, but many market experts remain optimistic about a forthcoming rally, citing short-term volatility this week. Veteran trader Peter Brandt has shared a bullish forecast for BTC, predicting the crypto to reach $327K. The upcoming US CPI inflation figures, along with US PPI and Fed official’s remarks, will be closely monitored for potential cues, as well as Fed Chair Jerome Powell's expected speech.
Amid these concerns, there is a prevailing sentiment in the market that digital assets will see a recovery in the coming days, driven by pro-crypto sentiment and the potential influence of Donald Trump’s promises for the crypto sector.