The impact of the US CPI data on crypto assets (especially Ethereum) is mainly transmitted through the following channels, with the core logic being inflation expectations → Fed policy → USD liquidity → risk asset pricing:

1. Data above expectations (e.g., core CPI reaches 3%)

Path:

CPI exceeded expectations → Market strengthens "persistent high inflation" expectations → Fed delays interest rate cuts/maintains high rates → Dollar strengthens + Risk assets sell-off → Crypto Assets under pressure

The specific impact on Ethereum:

- Short-term downward pressure: A stronger US Dollar Index (DXY) may weaken the appeal of ETH priced in dollars, and traders may sell ETH for dollars as a safe haven.
- Rising capital costs: A high interest rate environment will increase the cost of leveraged trading, suppressing the borrowing demand in the DeFi ecosystem (such as the increase in ETH staking lending rates).
- Institutional capital outflow: If U.S. stocks decline due to tightening expectations, ETH, which is positively correlated with U.S. stocks, may be reduced in position by institutions in sync (refer to the correlation between BTC and Nasdaq).

Historical Case: In June 2023, the CPI year-on-year was 3.2%, exceeding expectations, and ETH fell by more than 5% on that day.

2. Data below expectations (e.g., core CPI falling to 2.8%)

Path:

CPI lower than expected → Inflation cooling signal → Market bets on the Fed cutting interest rates early → Dollar weakens + Risk appetite rebounds → Crypto Assets rebound

Positive news for Ethereum:

- Improved liquidity expectations: The expectation of interest rate cuts will drive funds into high-risk assets, and ETH, as a "digital tech stock", will benefit significantly.
- On-chain activity recovery: In a low interest rate environment, the TVL and Gas fees of DeFi protocols (such as Uniswap and Aave) may rebound, supporting the fundamentals of Ether.
- Speculative sentiment is warming up: The funding rate for ETH perpetual contracts in the derivatives market may turn positive, driving a short-term short squeeze.

Historical Case: In December 2024, CPI fell to 2.6%, and ETH rose by 18% within a week.

3. The uniqueness of Ethereum (distinguished from Bitcoin)

- More sensitive to macro liquidity: ETH has a correlation of 0.7 with tech stocks (such as ARKK), which is higher than BTC, and reacts more intensely to interest rate changes.
- Staking yield impact: If CPI triggers an increase in market volatility, ETH staking APY may rise temporarily due to increased on-chain transactions (but long-term still depends on Fed policy).
- Narrative switching risk: If data leads to "risk aversion" dominating, funds may rotate from Ether to BTC (similar to the interest rate hike cycle in 2022).

4. Trading Strategy Recommendations

- Before data release:
- Pay attention to the CME Fed watch tool (changes in interest rate cut probabilities) and ETH futures open interest (beware of both long and short liquidation).
- Hedging strategy: Buy ETH put options or go long on the ETH/BTC exchange rate to hedge against macro risks.
- After the data is released:
- If CPI exceeds expectations, watch the $3,000 key support level (Ethereum 2025 psychological barrier);
- If the CPI is lower than expected, pay attention to the $3,500 breakout situation (previous high resistance level).