Bitcoin volatility ahead of US CPI could impact USD and risk currencies

Cryptocurrency markets, particularly Bitcoin, face a critical juncture ahead of this week's US Consumer Price Index release, with potential spillover effects on forex markets. According to the Bybit × FXStreet report, a mild CPI print could propel Bitcoin past key resistance levels, potentially weakening the US dollar and boosting risk-sensitive currencies. The correlation between crypto markets and traditional risk assets suggests that a Bitcoin rally could support currencies like AUD, NZD, and emerging market pairs. Conversely, a hot inflation reading might trigger crypto selling and dollar strength. The report highlights growing interconnectedness between digital assets and forex markets, with institutional traders increasingly monitoring crypto movements for broader market signals. Key levels to watch include Bitcoin's resistance at current levels and its impact on USD/JPY and commodity currency pairs.