CPI at 2.7%: Crypto’s Inflation Tango 🕺💸

by

US inflation is like a stubborn ex-stuck near 3%, neither breaking up nor committing. Crypto? Still in limbo: “Enough disinflation to keep risk-assets half-enthusiastic, but not enough to make the Fed’s hand twitch toward rate cuts!” 😂

2.7% YoY, 0.3% MoM. “Still uncomfortable,” says Fed, who’s basically saying, “We’re not done with this awkward dance yet.” 🤷♂️

  • Mild disinflation gives Bitcoin a little love when the dollar slouches, but not enough to make it scream “I’m ready!” 🚀💸
  • FX drama: EUR/USD is the love triangle, Bitcoin’s the third wheel. Downside CPI shocks? Risk-on vibes. Upside surprises? Dollar flexes, crypto cringes. 💔

    • CPI, the Fed, and Liquidity

    December CPI: 2.7% YoY, same as November. Core CPI edges up to 2.7%-Fed’s target is still a mirage. Analysts whisper, “We’re so close to 2%!” Meanwhile, the Fed’s dating app profile says, “Looking for gradual disinflation, not a rebound.” 💔

    Investors bet on 50 bps of easing this year-enough to give liquidity a pat on the head but not enough for a full-blown party. TD Securities says H2 2026 will be “gradual disinflation” (code for “we’re not sure”). Crypto rallies? More like a slow grind. 🐢

    Macro Tone and Crypto Risk Appetite

    FX Signals, Dollar Flows, and Bitcoin

    EUR/USD is the drama queen. If it slips below 1.1639, panic ensues. Traders whisper, “200-day SMA? November lows? We’re in a rom-com, not a thriller!” 😅

    But if EUR/USD breaks above 1.1807? Cue the confetti! 1.2000 is the “psychologically important” finish line. Strong euro, weak dollar = Bitcoin’s dream date. But hey, don’t forget the spot ETF drama-it’s the sidekick in this love story. 💘

    Implications for Crypto Positioning

    Balance sheets, policy uncertainty, and inflation: the holy trinity of crypto chaos. Traders? They’re like circus clowns-juggling CPI data, leveraged bets, and existential dread. 🤹♂️

    A 2.7% CPI? Status quo: Dips get buyers, but leverage is a dare. A downside shock? Bitcoin’s like, “Finally!” An upside surprise? Dollar flexes, crypto gets ghosted. 🎢

    Read More

    2026-01-13 15:43