Bitcoin and Altcoins Like Cardano, BNB, and Solana Await US Inflation Data and Donald Trump Inauguration

Bitcoin and other cryptocurrencies, including Cardano, BNB, and Solana, showed little price action on Monday morning as investors awaited key US inflation data and the inauguration of Donald Trump.

Bitcoin price was trading below $95,000, while the prices of the mentioned altcoins—except BNB—had entered a bear market, dropping over 20% from their December highs.

The weakness in the crypto space follows that of the stock market. For instance, on Friday, the Dow Jones and Nasdaq 100 indices closed down by over 300 points after the red-hot December nonfarm payroll (NFP) data.

The decline was mainly driven by the rising US dollar and US government bond yields as the Federal Reserve is seen maintaining a hawkish stance. The US dollar index (DXY) soared to $110, the highest level in two years. Similarly, the 30-year and 5-year government bond yields also rose.

Hence, the upcoming US inflation data will be closely watched as the Fed has stated that it is focusing on the report. Minutes released on Wednesday showed that most officials were concerned that inflation had become sticky and entrenched in the economy.

Economists expect the headline Consumer Price Index (CPI) to rise from 2.7% in November to 2.9% in December. Core inflation is also seen remaining above 3.3%.

Most officials have indicated that they will be more hawkish this year. The bond market is now pricing in only two rate cuts, with the first expected in July.

Bitcoin and altcoins like Cardano, Solana, and BNB have tended to perform well when the Fed is dovish. In fact, Mark Zandi, the chief economist at Moody’s, warned that the rising bond yields could crash the stock and crypto markets this year.

I’ve argued that most asset markets appear overvalued, bordering on frothy. Stocks, corporate bonds, single family housing, crypto and gold, quickly come to mind. But what could be the catalyst for them to selloff? How about a meaningful correction in the Treasury bond market.

Donald Trump inauguration up ahead

The week will also be crucial for Bitcoin and other altcoins ahead of the Donald Trump inauguration, which will take place on January 20. Some crypto analysts expect the coins to rally into the inauguration and the eventual Gary Gensler resignation.

Trump has promised to be a more crypto-friendly president. According to Arkham data, his crypto portfolio is valued at nearly $20 million. He has also launched World Liberty Financial, which has raised millions of dollars.

Moreover, there are suggestions that he will sign a Strategic Bitcoin Reserve as he aims to make the US the crypto capital of the world. Hence, Bitcoin and other altcoins could see some volatility ahead of the inauguration.