Bitcoin volatility rises before and after US CPI announcement: Silkworm | coindesk JAPAN

On May 10, at 8:30 a.m. Eastern Time (12:30 p.m. UTC, 9:30 p.m. Japan Time), the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) released the April Consumer Price Index (CPI). To be announced.

Inflation is expected to remain flat at 5%, with core inflation, which excludes the volatile food and energy component, rising 5.5% following a 5.6% increase in March, according to Reuters forecasts released by FXStreet.

According to Dessislava Aubert, a research analyst at Paris-based crypto data provider Kaiko, Bitcoin (BTC) has historically seen volatility six hours before and after inflation data was released. said to be increasing.

In the chart above, the blue line represents the average volatility for the current month measured in absolute hourly rate of change. The orange line represents volatility six hours before and after the CPI announcement.

The blue line has been steadily declining over the past two years, and the orange line has been sloping upwards, especially after April 2022. The orange circle consistently sits above the blue circle, indicating that monthly inflation data tend to inject extra volatility into the market.

“Volatility, especially before and after data releases, has remained above average. This trend continues as the US Federal Reserve (Fed) made it clear last week that monetary policy will become more data-dependent. probably,” Aubert said in an email.

In other words, Bitcoin is likely to experience price volatility today. Bitcoin is currently trading around $27,620, according to CoinDesk data.

The Fed last week raised interest rates by 0.25%, raising the base rate to a range of 5% to 5.25%. The statement opened the door to a pause in the rate hike cycle, but Chairman Jerome Powell signaled in his post-FOMC press conference that the Fed would maintain a data-dependent stance.

As such, if inflation beats expectations, it could strengthen the case for continued rate hikes and hurt risk assets, including crypto. On the other hand, if the data falls short of expectations, Bitcoin could become more volatile.

The Fed began a tightening cycle 14 months ago to curb ferocious inflation and has since raised interest rates by 5%. Tight liquidity has roiled cryptocurrency markets over the last year.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Kaiko
｜Original: Bitcoin Tends to Become More Volatile Around Monthly US Inflation Releases: Kaiko