U.S. CPI report drops today at 8:30 ET — here's why crypto traders are watching closely.

The mechanics: If inflation data comes in cooler than expected, the Fed is more likely to pause or cut rates. That means cheaper borrowing costs and more money sloshing around the system.

Where does it flow? When yields on safe assets (bonds, treasuries) drop, capital rotates into risk assets seeking higher returns. Bitcoin and altcoins historically benefit from this liquidity shift — they're first in line when the carry trade kicks in.

The playbook: Soft CPI → Rate cut odds rise → Fed pivot narrative → Risk-on sentiment → Capital into crypto and emerging tokens.

Timing matters. If data surprises to the downside, watch for immediate on-chain volume spikes and derivatives positioning shifts. Last time CPI printed lower than expected, BTC saw a 3-4% pop within hours.

Not guaranteed, but the macro setup is there. Keep an eye on futures markets at the release — they'll price it in first.