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Bitcoin Drops As Crypto Markets Brace For US CPI Data, FOMC Meeting On ”Frantic Macro-Wednesday”

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FOMC Meeting
FOMC Meeting

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Bitcoin fell as traders braced for Wednesday’s US inflation data and an FOMC meeting that will be pivotal for the outlook for crypto assets.  

”The stage is set for a frantic macro-Wednesday, with both May CPI data and the Fed’s interest rate decision poised to move the market,” said K33 Research in a June 11 note.

Crypto Market Turns Red Ahead Of FOMC Meeting, CPI Data

BTC is trading down a fraction of a percent at $67,471 at 5:16 a.m. EST on trading volume that dropped more than 4% to $29.4 billion. The crypto industry’s market cap is also down 0.3% at $2.45 trillion amid a lull before macro Wednesday gets underway in the US.

Six of the other top-ten largest cryptos by market cap also dropped with the remainder showing anemic gains amid anxiety about the CPI data and the Federal Open Market Committee (FOMC) meeting to discuss interest rates. 

The Ethereum (ETH) price dropped to a three-week low of $3,448, bringing its weekly decline to 7.4%. BNB (BNB), Solana (SOL), and Dogecoin (DOGE) have also seen double-digit dips this week. 

Markets Expect The FOMC To Keep Interest Rates Unchanged 

All eyes are now on the Fed Reserve Chair, Jerome Powell, and the FOMC committee to see how they react to May’s inflation data, and whether it prompts a rethink on the Fed’s hawkish stance. 

In April, the US Consumer Price Index (CPI) increased by 0.3% month-on-month, while annual inflation increased by 3.4%. The core inflation index, which caters to all items aside from food and energy, also increased by 0.3%. 

According to the CME FedWatch Tool, a majority of analysts expect that the Fed will leave interest rates unchanged at 5.25% to 5.5%. 

US Senator Elizabeth Warren is already championing rate cuts, saying the Fed’s hawkish outlook is increasing the cost of housing and insurance. 

If the Fed trims rates, it will boost demand for risk assets such as crypto. To position for such news, some traders like to hedge their bets by investing in presales like 99Bitcoins (99BTC), which have upside potential while being shielded from the downside before listing. 99BTC has already raised $2.1 million in funds. 

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