Since the beginning of March, Bitcoin has seen increased buying, with the price rising from around $20,000 on March 11 to $28,300 at press time. However, the CPI (Consumer Price Index) data for March, scheduled for April 12, could bring some fresh volatility to the crypto market.
In the near future, the US Federal Reserve (Fed) will release the minutes of the latest FOMC (Federal Open Market Committee) meeting.
While markets like the crypto market would like to see inflation fall faster, their view seems to differ from that of the Fed. Although market sentiment indicates that rate hikes may not last long, the Fed remains belligerent.
According to data from the tool FedWatch by CME Group said, the Fed is likely to repeat the rate hike by 0.25%. Moreover, according to analyst James Choi, the upcoming CPI data will make the strength of dollar free fall for three months.
“People don’t seem to know how $USD $DXY will fall in the next 3 months,” Choi stated.
So what can Bitcoin achieve amid the possible volatility after the April CPI data is released?
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How might Bitcoin react to this month’s CPI data?
Volatility is how most traders profit in a turbulent market like the bitcoin market and the upcoming CPI data seems to suggest a lot of volatility.
According to Kaiko, when it comes to volatility, Bitcoin is very different from stocks. The difference between Nasdaq and Bitcoin’s 30-day rotational volatility hit a one-year high due to the US banking crisis.
Kaiko reported last week that the correlation between Bitcoin and Gold is currently stronger than the correlation between Bitcoin and the S&P 500. The inverse correlation between BTC and the US dollar, according to Kaiko, is also rapidly dissolving. variable.
Following the trend, if the US dollar loses control, we could even see BTC price drop in the short term due to the decreasing correlation. BTC is currently facing resistance at $28,733, with support at $27,794.
See also: US government: Decentralized cryptocurrency market threatens national security