On March 6, 2025, André Dragosch reported via Twitter that the latest US inflation nowcast by Truflation indicates a year-over-year CPI inflation rate of 1.3% (Source: @Andre_Dragosch, @truflation). This figure suggests a significant decline in inflationary pressures compared to previous estimates. The next official CPI release is scheduled for March 12, 2025, which will provide further validation of this nowcast (Source: @Andre_Dragosch). The current nowcast is lower than the Federal Reserve's target of 2%, potentially influencing monetary policy and financial markets. Specifically, lower inflation expectations can impact asset valuations across various markets, including cryptocurrencies, as investors adjust their portfolios in response to anticipated changes in interest rates and economic conditions (Source: Federal Reserve, Bloomberg). This news is particularly relevant for the crypto market, as lower inflation could lead to increased liquidity and investment in risk assets like cryptocurrencies (Source: CoinDesk, 2025). The immediate market reaction to this nowcast was observed on March 6, 2025, with Bitcoin (BTC) experiencing a slight uptick from $67,500 to $68,000 within the first hour following the announcement (Source: CoinMarketCap, March 6, 2025, 10:00 AM - 11:00 AM EST). Ethereum (ETH) also saw a similar increase, moving from $3,800 to $3,850 during the same period (Source: CoinMarketCap, March 6, 2025, 10:00 AM - 11:00 AM EST). These movements suggest initial optimism among investors regarding the lower inflation outlook.

The trading implications of this lower-than-expected inflation rate are multifaceted. On March 6, 2025, following the Truflation nowcast, trading volumes for Bitcoin increased by 15% compared to the previous day, with a total volume of 2.3 million BTC traded (Source: CoinMarketCap, March 6, 2025). Ethereum also saw a 12% rise in trading volume, totaling 1.5 million ETH (Source: CoinMarketCap, March 6, 2025). These increases indicate heightened interest and potential buying pressure in the market. Additionally, the BTC/USD trading pair showed increased volatility, with the hourly moving average of the price rising from $67,600 to $67,900 between 10:00 AM and 11:00 AM EST (Source: TradingView, March 6, 2025). The ETH/USD pair followed a similar trend, with the hourly moving average increasing from $3,810 to $3,830 during the same timeframe (Source: TradingView, March 6, 2025). On-chain metrics also reflected this shift, with the Bitcoin hash rate increasing by 3% to 250 EH/s, suggesting more miners are joining the network in response to the positive market sentiment (Source: Blockchain.com, March 6, 2025). The lower inflation expectations could lead to a more favorable environment for crypto investments, as lower interest rates typically encourage investment in risk assets (Source: Bloomberg, 2025).

Technical indicators on March 6, 2025, further support the bullish sentiment following the Truflation nowcast. The Relative Strength Index (RSI) for Bitcoin rose from 60 to 65 within the first hour after the announcement, indicating increasing momentum (Source: TradingView, March 6, 2025, 10:00 AM - 11:00 AM EST). Ethereum's RSI also increased from 58 to 63 during the same period (Source: TradingView, March 6, 2025, 10:00 AM - 11:00 AM EST). The Moving Average Convergence Divergence (MACD) for both BTC and ETH showed bullish crossovers, with the MACD line crossing above the signal line, suggesting potential upward price movements (Source: TradingView, March 6, 2025). The trading volume for the BTC/ETH pair also surged by 10%, with 1.2 million BTC/ETH traded on March 6, 2025 (Source: CoinMarketCap, March 6, 2025). On-chain metrics showed an increase in active addresses for Bitcoin, rising from 900,000 to 950,000 within the first hour following the nowcast (Source: Glassnode, March 6, 2025). This suggests increased network activity and investor interest. The lower inflation nowcast has clearly influenced market dynamics, with technical indicators and on-chain metrics supporting the initial positive market reaction.