By Omkar Godbole (All times ET unless indicated otherwise)
The market is about to be hit with the first major U.S. economic event of 2025: the December Consumer Price Index (CPI) data. As hawkish Federal Reserve fears loom and bitcoin’s correlation with tech stocks strengthens, this report holds significant weight for the digital assets market.
Recent reports indicate that the liquidity inflows from stablecoins have stalled, leading to questions about the sustainability of Bitcoin’s price recovery from below $90,000. In anticipation of potential downside volatility, traders are reportedly adding short-dated puts to their portfolios.
Expert Insights on Upcoming CPI Data
Experts are weighing in on the implications of the forthcoming CPI report:
QCP Capital: “In the crypto space, a cautious sentiment is apparent in BTC options flows, with puts rolled below the crucial $90k support level. Elevated front-end volatilities and the high VIX of 18.68 suggest that volatility is likely to persist through January.”
Geoffrey Chen, author of the Fidenza Macro blog: “The robust market activity in November, coupled with the resolution of election-related uncertainties, has boosted business confidence, possibly resulting in stronger economic data. Additionally, the recent uptick in oil prices supports a stagflation narrative, which could elevate risks associated with tomorrow’s CPI report and the upcoming FOMC meeting, pressuring risk assets further.”
Markus Thielen, founder of 10x Research: “Bitcoin is currently trading within a narrowing wedge pattern. Heightened expectations regarding an increase in CPI numbers suggest that a lower-than-expected inflation reading could trigger a rally in bitcoin.”
Focus on XRP and AI Tokens
XRP has seen an impressive surge to $2.90, matching its December high, buoyed by technical analysis that indicates a possible continuation upward. Meanwhile, dip buyers have shown enthusiasm for AI-related tokens such as FAI, GRASS, VIRTUAL, Ai16z, and TAO, suggesting these currencies could see substantial gains if the CPI prompts renewed risk appetite among investors.
Key Upcoming Dates in Crypto and Macro
- **January 15:** Degen liquidity mining airdrop snapshot taken.
- **January 15:** Mintlayer releases version 1.0.0, enabling native BTC cross-chain swaps.
- **January 17:** Oral arguments at the U.S. Court of Appeals regarding KalshiEX LLC v. CFTC.
- **January 23:** U.S. SEC’s first deadline for a decision on Grayscale Solana Trust (GSOL).
- **January 25:** U.S. SEC’s first deadline for decisions on proposals for new spot solana (SOL) ETFs.
Market Movements and Future Insights
As we draw closer to the CPI release, major markets are poised for shifts. Bitcoin has moderately increased by 0.51%, closing at $96,951.13, while Ether has slightly declined to $3,207.75. The fluctuation in assets, coupled with significant movements in equities such as MicroStrategy and Coinbase, underscores the volatility surrounding this economic event.
In conclusion, the impending CPI data release is set to exert a powerful influence over market behaviors in both crypto and traditional financial sectors. Investors and traders alike should prepare for a potential upheaval, as the interplay between economic indicators and market sentiment continues to evolve.
