The correlation between Bitcoin and U.S. tech stock indicators hit a two-year high, suggesting that the stock market's reaction to U.S. inflation data released later on Wednesday could set the tone for digital tokens. According to data compiled by Bloomberg, the 30-day correlation coefficient between the largest cryptocurrency and the Nasdaq 100 index is around 0.70. A correlation coefficient of 1 indicates that the asset is moving in unison, while a negative 1 indicates that the asset is moving in the opposite direction. The inflation report is expected to show solid price pressures at a time when markets are worried about room for further rate cuts amid the Fed's strength in the U.S. economy and uncertainty over the impact of Donald Trump's agenda. Against this backdrop, bond yields and the US dollar rose, while stocks and cryptocurrencies came under pressure. As of 9:21 a.m. Singapore time on Wednesday, Bitcoin was changing hands at $96,900, about $11,500 below last month's all-time high.

The correlation between Bitcoin and U.S. tech stock indicators hit a two-year high, suggesting that the stock market's reaction to U.S. inflation data released later on Wednesday could set the tone for digital tokens. According to data compiled by Bloomberg, the 30-day correlation coefficient between the largest cryptocurrency and the Nasdaq 100 index is around 0.70. A correlation coefficient of 1 indicates that the asset is moving in unison, while a negative 1 indicates that the asset is moving in the opposite direction. The inflation report is expected to show solid price pressures at a time when markets are worried about room for further rate cuts amid the Fed's strength in the U.S. economy and uncertainty over the impact of Donald Trump's agenda. Against this backdrop, bond yields and the US dollar rose, while stocks and cryptocurrencies came under pressure. As of 9:21 a.m. Singapore time on Wednesday, Bitcoin was changing hands at $96,900, about $11,500 below last month's all-time high.