Critical data continues to come from the US this week for Bitcoin. At this point, the US CPI data will be announced first today.
While the lack of crypto-focused catalysts has investors focusing on macroeconomic events and expecting a rise from these events, one analyst said that if the US CPI data falls as expected, BTC could rise and short holders could suffer losses.
Speaking to Cointelegraph, Swyftx analyst Pav Hundal said that if the US August CPI data comes in line with expectations and falls, a classic BTC short squeeze could occur that triggers a rally in Bitcoin.
Lower August CPI data will likely push investors to expect a bigger rate cut next week, Hundal said.
In contrast, higher-than-expected CPI data could potentially cause a BTC sell-off and decline, according to the analyst.
“If the US CPI, which will be released today, falls as expected, anyone holding a short position will likely lose money and you could see a classic short squeeze trigger a rally.
While investor confidence in the market remains high, I think the annual Consumer Price Index (CPI) will not surprise on the upside due to the way it is calculated.
But the unimaginable has been happening on the Bitcoin and crypto front lately, and if that happens again, we could see a very heavy sell-off in BTC and other risk assets.”
Bitcoin continues to trade at $56,560 at the time of writing.
*This is not investment advice.
