The U.S. Bureau of Labor Statistics is scheduled to release the Consumer Price Index (CPI) of April on Wednesday at 8:30 AM ET (12:30 UTC).

According to Reuters’ estimates, published by FXStreet, the headline CPI is expected to remain unchanged at 5%, while the core CPI, which excludes volatile food and energy components, is projected to have risen by 5.5% after March’s 5.6% rise.

According to Dessislava aubert, research analyst with Paris-based Kaiko, Bitcoin (BTC), has seen historically increased intraday volatility six hours before and after inflation data.

Price volatility is usually highest in the six-hour window around the release of the monthly inflation figures at 8:30 ET. (Kaiko)

The blue line in the chart above represents the average monthly volatility as measured by absolute hourly return. The orange line shows the volatility in the CPI six-hour window.

Orange line is trending up, especially since April 2022. Orange circles are consistently above blue circles. This is a sign that monthly inflation data tends inject more volatility into the market.

“The intraday volatilities, particularly around data releases, remain above average.” Aubert stated in an email that this trend would continue, as the U.S. Federal Reserve has made it clear over the past week that monetary policies will be more data-dependent.

Bitcoin could experience increased price volatility (price swings either way) later today. According to CoinDesk, the leading cryptocurrency in terms of market value is trading flat around $27.620.

Last week, the Federal Reserve (Fed), raised interest rates by 25 basis point. This brought the benchmark borrowing cost to a range of 5%-5.25 percent. The Fed’s Jerome Powell, however, maintained that the Fed would not pause the rate-hike cycle despite the fact that the policy statement was announcing a possible pause.

A reading of inflation above the forecast could strengthen the case for rate hikes. This would hurt risk assets such as cryptocurrencies. If the data is below expectations, then bitcoin’s volatility may be higher.

Since then, the Fed has increased rates by 500 basis points to combat inflation. Last year, the tightening of liquidity caused cryptocurrencies to be impacted.

Parikshit Miishra is the editor.