U.S. CPI Report To Come in Later This Week, What’s in it For Crypto?
The government’s decision to increase interest rates to combat inflation will be determined by the release of the Consumer Price Index (CPI) value on January 12th. If the results are favorable or not, the price of Bitcoin may likely be affected.
CPI Values Determines Next Line Of Action
Compared to the intensified rate in the summer of 2022, the economy’s inflation rates have decreased in recent months. However, despite this drop in inflation rates, reports continue to paint a deplorable picture for the economy.
This CPI data, which will be released on January 12th, is crucial as it will play a significant role in the nation’s decision-making. The United States Federal Reserve will use these values to determine whether it should stick with its planned policy of raising interest rates to combat inflation.
According to reports on the state of the economy in 2022, there was an increase of more than 4% in interest rates; as a result, more increases are probably possible and should be expected.
Additionally, the publication of the December CPI values will contribute to this decision-making process.
According to analysis reports, the year over year value will be around 5.6%, and the month over month value will be 0.3%.
According to this estimate, the report value represents the largest CPI increase to have been achieved in more than 40 years.
According to a Bloomberg report, China rather than Fed rate hikes could have attributed to the decline in inflation. The report went on to say that China’s departure from Covid had a direct impact on the inflation rate.
The report also emphasized how energy prices have dropped significantly, which has also been shown to significantly lower inflation.
Bitcoin May Be Affected By The Numbers
When it comes to the top cryptocurrency, Bitcoin has made a strong start in 2023. Due to its early-year momentum, it was able to scale past the $16,000 resistance mark and reach the $17,000 mark.
The market situation for cryptocurrency could be impacted by CPI values as well. A very unstable and volatile week may, however, be in store for it given its connection to CPI values.
According to some analysts, Bitcoin may approach the $20,000 resistance level if a strong output for CPI values is released on 12th January.
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