Bitcoin plunges as crypto markets prepare for US CPI data and FOMC meeting as crazy macro Wednesday approaches

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Bitcoin fell as traders braced for Wednesday’s U.S. inflation data and the FOMC meeting, which will have a significant impact on the crypto asset’s outlook.
“The macro picture is set to play out on Wednesday, with May’s CPI data and the Fed’s rate decision both likely to move markets,” K33 Research said in a June 11 note.
Crypto markets turn negative ahead of FOMC meeting and CPI data release
Bitcoin (BTC) was trading at $67,471, with trading volume down more than 4% to $29.4 billion at 5:16 a.m. ET. The crypto industry’s market cap also fell 0.3% to $2.45 trillion before the U.S. macro situation began.
Six of the other top 10 cryptocurrencies by market cap also fell, with the rest showing slight gains amid concerns over CPI data and the Federal Open Market Committee (FOMC) discussion of interest rates.
Ethereum (ETH) prices fell to a three-week low of $3,448, bringing its weekly loss to $7.41T. BNB (BNB), Solana (SOL), and Dogecoin (DOGE) also saw double-digit declines this week.
It’s a big week for the markets, which will receive fresh CPI data and the FOMC’s interest rate decision tomorrow.
Markets almost always correct before an event and then rise again.
The same price action occurred in the previous months.
— Michaël van de Poppe (@CryptoMichNL)
June 11, 2024
Markets expect FOMC to keep interest rates unchanged
All eyes will now be on Fed Chairman Jerome Powell and the FOMC committee to see how they react to May’s inflation data and whether it prompts a reconsideration of the Fed’s hawkish stance.
In April, the US Consumer Price Index (CPI) increased by 0.3% on a monthly basis, while the annual inflation rate increased by 3.4%. The core inflation index, which measures all items except food and energy, also increased by 0.3%.
Most analysts expect the Fed to keep interest rates unchanged at 5.25% to 5.5%, according to the CME FedWatch tool.
U.S. Senator Elizabeth Warren has called for a rate cut, saying the Fed's hawkish stance is increasing the cost of homes and insurance.
If the Fed cuts interest rates, it will boost demand for risky assets such as cryptocurrencies. In response to such news, some traders like to hedge by investing in pre-IPO projects such as 99Bitcoins (99BTC), which have the potential to rise before listing, while being protected from the fall. 99BTC has raised $2.1 million in funding.