What are CPI data? (Consumer Price Index)
Along with interest rates, macro events that move the crypto market the most today.
Here's a quick guide to interpreting these numbers and how Bitcoin and altcoins usually react:
Lower than expected (e.g. 2.5% or 2.6%) Bullish 🚀 Indicates that inflation is decreasing, allowing the Fed to lower interest rates more quickly, injecting liquidity into the market.
Equal to expected (2.7%) Neutral / Volatility ⚖️ Often sees a "mechazo" in both directions, then the price continues its previous trend.
Higher than expected (e.g. 2.9% or higher) Bearish 📉 Indicates persistent inflation. The Fed will be forced to keep rates high, strengthening the Dollar (DXY) and hitting risk assets like BTC.
The "DXY" factor (Dollar Index)
At the time of the data release, open the DXY chart. There is almost a perfect inverse correlation in the first few minutes:
If DXY rises strongly: Bitcoin tends to fall.
If DXY falls strongly: Bitcoin tends to surge.
Risk Management Tips.
The "Mechazo": In the first 5-15 minutes after the news, the market often sweeps stop-losses in both directions (liquidity). Many traders prefer to wait for the 15-minute candle to close to confirm the actual direction.
Altcoins vs BTC: If the data is very negative (high inflation), altcoins tend to fall much more sharply in percentage terms than Bitcoin.
Beware of the Core CPI: Sometimes the overall CPI comes out well, but the Core CPI (which excludes energy and food) comes out high. The market places more importance on the Core CPI because that's what the Fed watches closely.
$BTC $XAU $ETH
Along with interest rates, macro events that move the crypto market the most today.
Here's a quick guide to interpreting these numbers and how Bitcoin and altcoins usually react:
Lower than expected (e.g. 2.5% or 2.6%) Bullish 🚀 Indicates that inflation is decreasing, allowing the Fed to lower interest rates more quickly, injecting liquidity into the market.
Equal to expected (2.7%) Neutral / Volatility ⚖️ Often sees a "mechazo" in both directions, then the price continues its previous trend.
Higher than expected (e.g. 2.9% or higher) Bearish 📉 Indicates persistent inflation. The Fed will be forced to keep rates high, strengthening the Dollar (DXY) and hitting risk assets like BTC.
The "DXY" factor (Dollar Index)
At the time of the data release, open the DXY chart. There is almost a perfect inverse correlation in the first few minutes:
If DXY rises strongly: Bitcoin tends to fall.
If DXY falls strongly: Bitcoin tends to surge.
Risk Management Tips.
The "Mechazo": In the first 5-15 minutes after the news, the market often sweeps stop-losses in both directions (liquidity). Many traders prefer to wait for the 15-minute candle to close to confirm the actual direction.
Altcoins vs BTC: If the data is very negative (high inflation), altcoins tend to fall much more sharply in percentage terms than Bitcoin.
Beware of the Core CPI: Sometimes the overall CPI comes out well, but the Core CPI (which excludes energy and food) comes out high. The market places more importance on the Core CPI because that's what the Fed watches closely.
$BTC $XAU $ETH