The upcoming US Consumer Price Index (CPI) data is highly anticipated by investors in the cryptocurrency market, particularly those holding Bitcoin and gold.
According to recent market analysis, there is now a 70% chance of a Federal Reserve rate hike by December, up from earlier estimates. This increase in rate hike expectations has led to a decline in both Bitcoin and gold prices, as higher rates make yield-generating assets more attractive compared to those that pay no yield.
However, if the CPI data comes in lower than expected, it could reduce the urgency of a rate hike, potentially benefiting gold and partially restoring optimism for Bitcoin. This would be a significant development, as many analysts have built their year-end targets for gold around the assumption that inflation will cool down towards the Fed's target.