Which cryptos could see biggest moves after US CPI/Fed meeting? :: InvestMacro

By ForexTime

• Bitcoin, Ethereum falling over 3% each today
• Markets angsty ahead of Wednesday’s US CPI, Fed decision
• Avalanch has seen biggest up/down moves post-CPI
• Dogecoin, Solana historically more reactive to Fed meetings
• Traders could profit from big crypto volatility mid-week

 

The world’s 2 largest cryptos, Bitcoin and Ethereum, are both falling over 3% each!

 

 

These declines come on the eve of some ultra-important US economic events that could rock global financial markets.

 

On Wednesday, June 12th, markets will find out the latest:

• @12:30 GMT: US consumer price indices (CPI), which measure inflation, for May 2024
• @18:00 GMT: Fed interest rate decision and “dot plot” (Fed officials’ forecasts for US interest rates)
• @18:30 GMT: Press conference by Fed Chair Jerome Powell

Note that the monthly CPI releases and the Fed meetings are not often scheduled on the same day.

Hence, markets are set up for what could be a “double-whammy” Wednesday.

 

We’ve already written extensively about why these events impact financial markets worldwide.

This article will focus exclusively on the crypto world.

 

Which crypto could see the biggest moves this week?

Of the 11 different cryptocurrencies offered by FXTM …

Avalanch, Dogecoin and Solana have offered the biggest reactions to the US CPI prints and Fed decisions from the past 12 months.

 

Let’s break this down by the respective marquee events: US CPI and Fed meeting.

 

Using a 6-hour timeframe after the monthly CPI releases from the past 12 months:

1. Avalanch rose by as much as 16.7%, or fell as much as 7.1%
2. Solana rose by as much as 7%, or fell as much as 5.2%
3. Bitcoin Cash rose by as much as 5.7%, or fell as much as 3.4%
4. Chainlink rose by as much as 4.7%, or fell as much as 4.1%
5. Bitcoin rose by as much as 4.3%, or fell as much as 2.9%
6. Litecoin rose by as much as 3.4%, or fell as much as 4.2%
7. Ethereum rose by as much as 3.4%, or fell as much as 3.1%
8. Ripple rose by as much as 3.2%, or fell as much as 7.1%
9. Dogecoin rose by as much as 3%, or fell as much as 3.8%
10. Polygon rose by as much as 4.1%, or fell as much as 5.9%
11. Cardano rose by as much as 3.9%, or fallen as much as 4.8%

 

In the 6 hours after each of the FOMC rate decision announcements (the timeframe includes Fed Chair Jerome Powell’s press conference) over the past 12 months:

1. Dogecoin rose by as much as 14.1%, or fell as much as 2.5%
2. Solana rose by as much as 11.3%, or fell as much as 6%
3. Avalanch rose by as much as 9.2%, or fell as much as 6.1%
4. Bitcoin Cash rose by as much as 8.4%, or fell as much as 3.7%
5. Cardano rose by as much as 7.9%, or fell as much as 3%
6. Chainlink rose by as much as 6.9%, or fell as much as 3.3%
7. Polygon rose by as much as 6.6%, or fell as much as 6.3%
8. Ethereum rose by as much as 6.6%, or fell as much as 5.3%
9. Bitcoin rose by as much as 5.8%, or fell as much as 3.4%
10. Litecoin rose by as much as 4.5%, or fell as much as 6%
11. Ripple rose by as much as 4.4%, or fell as much as 5%

 

These biggest-in-class moves by Avalanch, Dogecoin, and Solana should produce sizeable opportunities for traders tomorrow.

How might cryptos react to US CPI and Fed meeting?

While markets are certainly complex organisms, here are some simple scenarios that traders could refer to as a guide ahead of tomorrow’s highly-anticipated events.

 

Cryptos may fall if:

• US inflation comes in higher-than-expected
• Fed dot plot points to just 1 or zero rate cuts for 2024
• Fed Chair Jerome Powell signals to the world that the intended US rate cuts have to be delayed

 

Cryptos may rise if:

• US inflation comes in lower-than-expected
• Fed dot plot sticks to its March 2024 forecasts for 3 rate cuts this year
• Fed Chair Jerome Powell refuses to sound “hawkish” but instead assures the world that rate cuts are indeed on the way

 

Either way, cryptocurrencies are set to deliver big moves, depending on how much markets are surprised tomorrow.

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Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com