Crypto markets slid 3% in the past 24 hours as traders await U.S. consumer price index (CPI) readings expected later Wednesday, with some expecting a dollar slide in a move that may bump up crypto prices.

Bitcoin (BTC) lost 1.3%, while majors ether (ETH), Solana’s SOL, Cardano’s ADA and XRP lost as much as 3%. Memecoin dogecoin (DOGE) slid the most with a 4.5% slide, while BNB Chain’s BNB was up 1% amid renewed interest in the blockchain’s ecosystem.

The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market cap, fell 2.5%.

The U.S. CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Changes in CPI readings tend to impact bitcoin, and the broader crypto market, as investors view the asset class as a hedge against inflation.

The outlook for the January CPI calls for a monthly increase of 0.3% for the all-items index and a 12-month inflation rate of 2.9%, providing cues on whether the Federal Reserve will cut interest rates in 2025 to battle rising prices.

Some traders expect a dollar unwind on any indications of a rate cut — which could bump risk assets and provide an entry for crypto investors looking to bet on higher prices.

“We infer that the market is heavily long on the dollar. Given that negative news has likely been priced in, we believe USD now faces greater downside risk,” Singapore-based QCP Capital said in a Telegram broadcast on Wednesday.

“Any positive news could force USD longs to unwind their positions en masse, potentially sending risk assets higher. Tonight’s CPI release could be the catalyst that triggers a sharp move lower in DXY.”

“However, this rising tide may not lift all boats. Bitcoin continues to underperform equities and gold, suggesting some hesitation within the crypto community. Liquidity remains thin across the numerous new listings each week, and last week’s large-scale liquidation wiped out many traders,” QCP said, referring to last Monday’s $1 billion liquidation event

QCP added purchasing “downside protection” — or options that hisse out as prices fall lower — continue to be the “best strategy” in the current environment.