When investing in cryptocurrencies, the overall economic environment is an important factor that cannot be ignored. Macroeconomic indicators, such as inflation rate (CPI), interest rate policy, and money supply, have a profound impact on the crypto market.

Bitcoin and US tech stocks correlation hits two-year high

This is reflected in the increasing correlation between cryptocurrencies and traditional financial markets. According to a recent report by , the 30-day correlation coefficient between Bitcoin and the Nasdaq 100 index has reached around 0.7, indicating a high positive correlation, which is a two-year high.

This suggests that Bitcoin and the key indicator measuring the performance of US tech stocks are gradually forming a tighter linkage, indicating that the boundaries between the crypto market and the traditional financial market are becoming increasingly blurred, and also highlighting the characteristics of Bitcoin as a risky asset in the global financial market.

Note: The correlation coefficient ranges from -1 to 1, and the closer it is to 1, the more the two variables tend to move in the same direction. In the financial field, a correlation coefficient above 0.7 is generally considered to be highly positively correlated.

Therefore, investors should closely monitor the global economic trends, changes in monetary policy, and market liquidity when making cryptocurrency investments.

Will CPI rise for 5 consecutive months?

The CPI data to be released tonight may affect the trend of Bitcoin, as it will affect the pace of interest rate cuts by the Federal Reserve. According to market forecasts, the year-on-year CPI rate for December is estimated to be 2.9%, slightly lower than the 2.7% in November, with a monthly increase of 0.4%, higher than the previous 0.3%, indicating that CPI may rise for the fifth consecutive month. The Federal Reserve's preferred core CPI (excluding food and energy costs) is estimated to have increased by 3.3% year-on-year, unchanged from November, with a monthly increase forecast at 0.2%, slightly lower than the previous 0.3%.

Although rent inflation is expected to remain low at 0.2% in December after slowing down in November, inflationary pressures still exist due to expectations of new tariffs after Trump's inauguration, continued strong auto sales, and rising medical costs (such as auto insurance and the Los Angeles fire).

Against this backdrop, the 10-year US Treasury yield has soared to nearly 5%, and the US dollar index has briefly touched a high of 110; in contrast, the stock and cryptocurrency markets are under pressure, with Bitcoin falling more than $11,000 from its previous high of $108,100, and US stocks also giving back their post-election gains.

Trump's inauguration ceremony

In addition, Trump is set to be sworn in on January 20th, and the new administration may quickly implement a series of policies. Market participants are weighing the potential risks of inflationary tariffs, immigration policies, and the impact of Trump's promise to make the US a global cryptocurrency hub.

According to a recent report by The Washington Post, Trump is expected to issue an executive order on his first day in office, addressing the issue of cryptocurrency industry's disintermediation, as well as repealing the controversial cryptocurrency accounting standard SAB 121.

Data from the Derive.xyz platform shows that hedging trading activity in the options market is significantly increasing, indicating that investors are preparing for the upcoming market volatility. Sean Dawson, the research director of the platform, said:

"The increase in the proportion of put options trading suggests that investors are hedging against potential downside risks during Trump's inauguration."

Looking ahead to the short-term outlook for Bitcoin, K33 Research analyst summarized:

"The market's sensitivity to interest rates over the past month shows that the CPI data to be released on Wednesday is particularly important. In addition, the momentum of Trump's policies may further strengthen in the days leading up to his inauguration."