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Bitcoin Waits for Guidance From U.S. Inflation Data, Bond Market

Bitcoin’s future trajectory may be influenced by the upcoming release of the U.S. consumer price index (CPI) report and the response of the bond market. The CPI report is expected to show a rise in the cost of living in the U.S., which could bolster the probability of rate cuts by the Federal Reserve and potentially benefit Bitcoin’s recovery. Increased rate cut prospects often have a positive impact on risk assets like cryptocurrencies. Additionally, market sentiment, including that of Bitcoin, could be influenced by the U.S. Treasury yield curve’s response to the CPI release. Slower inflation and higher rate cut expectations may lead to a bull steepening of the yield curve, which historically coincides with economic contraction and risk aversion. This could affect the performance of equities and further impact Bitcoin’s trajectory. Investment banks like JPMorgan and Citi are already speculating on the steepening of the yield curve. Overall, analysts and traders will closely watch the CPI data and bond market response for guidance on Bitcoin’s future movement.