Cryptocurrency markets have been lower over the past 24 hours as investors await key U.S. inflation data, with some speculating that a potential dollar softening could provide an entry point for risk assets including Bitcoin (BTC) and altcoins. Dogecoin Leads Crypto Market Drop as Traders Track US Dollar Position The crypto market experienced a 3% decline as major assets faced losses ahead of the US Consumer Price Index (CPI) report scheduled to be released today. Bitcoin (BTC) fell 1.3%, Ethereum (ETH), Solana (SOL), Cardano (ADA) and XRP fell by up to 3%, Dogecoin (DOGE) led the decline with a 4.5% drop, BNB Chain’s BNB positively diverged from the market by gaining 1% in value amid renewed interest in its ecosystem. Investors Watch CPI and Federal Reserve Moves The U.S. CPI measures inflation by tracking changes in the prices of consumer goods and services. Inflation trends tend to affect Bitcoin and other cryptocurrencies because some investors view them as hedges against inflation. Market analysts are forecasting a monthly CPI increase of 0.3% and an annual inflation rate of 2.9%, which could impact the Federal Reserve's monetary policy and potential rate cuts in 2025. Dollar Easing Could Boost Crypto Prices Some traders believe that the US dollar (USD) could weaken if the CPI data points to a possible interest rate cut, which could lead to higher prices of risky assets like crypto. “We conclude that the market is largely long on the dollar. Given that negative news is likely priced in, we believe the USD now faces greater downside risk,” Singapore-based QCP Capital noted in a Telegram post today. QCP suggested that if the dollar weakens significantly, “USD longs” could unwind their positions en masse, potentially sending Bitcoin and altcoins higher. “Tonight’s CPI release could be the catalyst that triggers a sharp decline in the US Dollar Index (DXY),” QCP added. *This is not investment advice. Continue Reading: Crypto Market Continues to Fall as Investors Await US Inflation Data! Could There Be a Reversal if Data Comes Back Positive?
