Powell Speaks, Bitcoin Drops—All Eyes on CPI Data

The first key event of the week has occurred—Jerome Powell spoke this morning, reiterating that the Federal Reserve is in no rush to cut interest rates, citing ongoing uncertainty around tariffs and trade wars. Similarly to what I mentioned a few days ago, investors are becoming more immune to tariff-related headlines, and Powell echoed this sentiment today.

Donald Trump has already stated he would not introduce a CBDC if re-elected, and Powell was asked the same question. His response? A firm no. Powell agreed that as long as he remains chair, the Federal Reserve will not create a central bank digital currency.

Although Powell’s speech had little impact on traditional markets, Bitcoin and the crypto market reacted sharply, with BTC dropping 4% and altcoins falling even further shortly after his remarks.

Next, we shift focus to the upcoming CPI data release, the next major event of the week. Core CPI is forecasted to rise by 0.1% from last month, while headline CPI is expected to decline by 0.1%—leaving YoY inflation unchanged. With what could be a mixed bag of results dropping at 12:30 AM AEST, the recent risk-off sentiment in crypto makes more sense.

Despite this, Bitcoin continues to hold key support at $95.7K. If CPI prints higher than expected, BTC could drop further and retest $90K, dragging altcoins down with it. However, a weaker-than-expected CPI would suggest cooling inflation, which could trigger a relief rally in crypto markets.

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