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Tonight at 9:30 PM, the US CPI data is a critical battle that could significantly impact the crypto market nerves.
This data is not only a key indicator of inflation but also a "weather vane" for the Federal Reserve's next move on interest rates, directly determining the short-term ups and downs of the crypto market. Currently, the market generally predicts this CPI to be 3.1%. The logic behind the impact is straightforward: if inflation data is higher than expected, the Fed will likely delay rate cuts, leading to tighter money and a probable decline in cryptocurrencies; if inflation is lower than expected, the call for rate cuts will grow louder, and the expectation of looser market liquidity will boost the crypto market.
However, Goldman Sachs analysts have poured cold water on this optimism, believing that the Fed's "preventive" rate cuts may have already peaked. Future rate cuts will require a noticeably weakening labor market. This means that a good CPI number alone is no longer enough; only a perfect balance of data showing "inflation under control but the economy slightly weakening" can rekindle market expectations for rate cuts. For the crypto market, this is a high-wire act.
Here are three tips for retail investors:
First, do not make reckless moves before the data is released. Do not gamble with real money on the outcome, as short-term market volatility will be especially large.
Second, do not sell your Bitcoin holdings easily. The core value of crypto assets will not change because of one data point. Don't let short-term fluctuations wash you out.
Third, if the market crashes after the data release, don't panic. This could be a good opportunity for long-term investors to buy core assets at a discount gradually.
Ultimately, investing is about managing uncertainty, not predicting every market fluctuation. During such critical data releases, sticking to your trading discipline and rhythm is more useful for long-term profits than guessing the direction of one data point.