Friends in the crypto circle are probably no strangers to CPI. CPI, or the "Consumer Price Index," reflects the changes in prices for consumer goods and services over a period of time and is mainly used to measure inflation.

So why does CPI affect the rise and fall of the crypto market? The core reason is:
When CPI rises quickly, it indicates high inflation pressure. At this time, central banks (like the Federal Reserve) may raise interest rates, meaning money becomes more "expensive," and investment capital flows may change.
In traditional markets, when interest rates are raised, the crypto market often experiences shocks because funds tend to favor more stable income products. Since cryptocurrencies are risk assets, capital may flow out, causing prices to fall.
Conversely, if CPI is below expectations, the market perceives less pressure, liquidity becomes more relaxed, and it is conducive to "risk-taking," making the crypto market more likely to strengthen.
Simply put, CPI data is like the "weather forecast" for the financial markets; it directly influences investor sentiment and capital flows. As a risk market, the crypto space is prone to "stormy weather" when there's a "rate hike alert."
However, markets often overreact or experience short-term volatility. When investing, it’s wise to pay attention to CPI release days and manage risks accordingly.