Inflation data will dominate the upcoming week, with key U.S. economic indicators set to influence expectations for interest rates and digital assets like bitcoin. The core PCE reading on Thursday and March CPI release on Friday will be pivotal in assessing whether the Federal Reserve can delay rate cuts, a shift in sentiment from earlier this year when cuts seemed imminent. Market probabilities for no rate cuts by 2026 have surged, reflecting growing uncertainty.

The implications for the crypto market are significant. André Dragosch from Bitwise Europe noted that bitcoin has already begun pricing in a potential U.S. recession, acting as an early warning signal. Recent positive economic data, such as an unexpected rise in the ISM Manufacturing Index, suggests the economy may be more resilient than anticipated, which could further affect risk appetite for cryptocurrencies.

As traders navigate these macroeconomic signals, the skewed risk-reward ratio for bitcoin leans toward the upside, although geopolitical tensions, particularly in the Middle East, could pose risks to this outlook.

Source: coindesk.com