The U.S. May Consumer Price Index (CPI) release tonight at 8:30 PM is set to be a pivotal event for crypto markets, with the core CPI forecasted to rise marginally to 2.9% year-over-year. This uptick reflects emerging inflationary pressures linked to ongoing U.S.-China trade tensions, notably impacting prices of consumer electronics, apparel, and household goods. Conversely, inflation in the service sector, including airfare and lodging, remains subdued, indicating a mixed inflationary environment.
Market participants anticipate the Federal Reserve will adopt a cautious stance, maintaining its current policy amid these inflation signals. Should the CPI data surpass expectations, the prospect of a delayed interest rate cut could dampen risk appetite, potentially pressuring Bitcoin towards the $106,000 support level. Conversely, inflation aligning with forecasts may bolster confidence, enabling Bitcoin to test resistance near $110,350.
In this volatile landscape, traders are advised to monitor the Federal Reserve’s upcoming communications closely, as guidance on rate adjustments will be crucial. The immediate market direction hinges on CPI outcomes and subsequent policy signals, underscoring the importance of a measured approach before initiating new positions.