But with news that inflation is showing signs of going down, we can expect inflation to drop below 2% soon and the Fed to lower interest rates soon. In particular, people are more optimistic and believe that the Fed will lower interest rates twice this year as inflation is gradually being controlled.
Inflation has only shown signs of being "sticky" not signs of going down.
For it to go down the chaos in the world has to calm down, energy prices have to come down, the supply chain disruptions have to stop, etc. then we can start seeing inflation start coming down and then we can see them lower the rates. None of it is happening yet though.
It is now clear that the Bitcoin market is highly connected to the US economy.
So you are saying that the economy (inflation + recession) in the rest of the world is fine and it is only US economy that is affected by these things?!
Shall we take a look at G7 countries in 2023?
| Country | Inflation rate | Interest rate |
| USA | 4.1% | 5.33% |
| Canada | 3.8% | 7.2% |
| UK | 5.2% | 5.25% |
| France | 5.7% | 3.5% |
| Germany | 5.9% | 3.5% |
| Italy | 5.9% | 5.0% |
| Japan | 3.27% | 0.1% |
The only deviance is Japan and Canadian interest rate but the rest are pretty much the same.
Things are worse in smaller economies. This is why Bitcoin is affected, because the economic crisis is a global event not a local thing limited to US economy.
Whether the market reacts to a news like the US CPI is a different matter that doesn't mean there is a "connection". It's just weak hands panicking/FOMOing after reading something in the news.