The upcoming U.S. inflation report is anticipated to influence Bitcoin's price, potentially pulling it out of its recent slumps. Historically, January figures have recorded price increases, and a higher-than-expected inflation rate might signal further work for monetary policy adjustments, as noted by Dallas Fed President Lorie Logan. Conversely, a soft inflation report could boost expectations for interest rate cuts, weakening the U.S. dollar and positively impacting Bitcoin. Recent data also shows that demand for Bitcoin remains strong, with significant buy announcements from companies like Japanese game studio Gumi and increased institutional investments in Bitcoin and ether ETFs. However, caution is prevalent among U.S. traders ahead of the inflation report. The crypto market is facing headwinds with changing dynamics, suggested by a recent note from BCA Research indicating record ETF inflows as warning signs. Key economic reports are set for release, including the Consumer Price Index and Producer Price Index, which will further shape market expectations and sentiments.

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