Bitcoin traders are adopting defensive strategies in anticipation of the upcoming U.S. Consumer Price Index (CPI) report, an event poised to significantly impact market expectations and the cryptocurrency’s trajectory.
The impending CPI data release is considered crucial, as a softer reading could bolster Bitcoin prices, while a hotter-than-expected inflation figure risks stalling recent gains or prompting a downturn.
As a hedge against potential volatility, traders are actively purchasing put options, with market data indicating nearly 40% of open interest resides in defensive positions designed to mitigate downside risk.
The report’s outcome is also pivotal for shaping market sentiment regarding potential adjustments to Federal Reserve monetary policy, a key driver for risk assets like Bitcoin.
Consequently, Bitcoin’s near-term movements are viewed as critically linked to the U.S. CPI report, making it a focal point for investor strategy in the cryptocurrency market.