The main economic data release for the trading week is the US inflation report. How will it impact the Bitcoin price?

The global cryptocurrency market cap has increased nearly 1.26% over the last day to US$1.07 trillion. The prices of several top cryptocurrencies, including Bitcoin and Ethereum, have also jumped in the last 24 hours. At the time of writing, Bitcoin was trading at US$22,198 while the price of Ethereum (ETH) was US$1,709. Among other top tokens, prices of Solana, XRP, Avalanche, and Polygon (Matic) have gotten marginally up in the last 24 hours, according to CoinMarketCap data.

The main economic data release for the trading week is the US inflation report. If US inflation decelerates even further in August, Wall Street might grow confident that the Fed may be done with its interest rate hiking cycle by the end of the year.  It might be premature for calls that the Fed is getting close to slowing its pace of rate hikes, but a couple of cooler-than-expected inflation reports might do the trick.

The August inflation report is expected to show an 8.1% price increase on the year, which would be an improvement from the 8.5% pace seen last month. Core inflation however might not be decelerating and that could keep the Fed committed to aggressive tightening. This is the last major economic release before the September 21^st FOMC meeting that has most economists expecting another 75 basis-point rate increase.  Other key data includes a couple of Fed regional surveys and the preliminary consumer sentiment report for September.

Bullish momentum had evaporated during the day prior, and the mood among traders was firmly risk-off as markets awaited the latest Consumer Price Index (CPI) readout. Today's surge in cryptocurrency prices may be short-lived as the overall market sentiment remains in the "Extreme Fear" zone, according to the Crypto Fear & Greed Index. Moreover, the interest rate hike in the US may be higher to tame inflation.

Experts claim, that since the beginning of 2022, the crypto market has been intensely following the stock market and a benchmark that is heavily weighted toward its tech stocks. The growing correlation between tech stocks or so to say the stock market, with the crypto market got the investment community quite worried, where several claimed that the decentralized market was not expected to suffer from factors originating in the mainstream economic and financial markets, but currently, everyone is grappling to find solutions and cope up with the present crypto market conditions.