Crypto Market Hinges on Wednesday's Inflation Data

The crypto market's direction in the short term is tied to whether US inflation eases, allowing the Federal Reserve to keep interest rates steady and ease pressure on the dollar by year-end.

Consumer price index data due Wednesday will be the first test, but the larger question is whether weaker labor demand outweighs still-elevated price pressures above the central bank's target.

ING strategists Chris Turner and Francesco Pesole expect a no-increase outcome to create a supportive cross-asset backdrop, which would lead to a benign decline in the dollar into year-end in a risk-positive climate.