After the release of the US Consumer Price Index (CPI) data for January, Bitcoin (BTC) surged dramatically, surpassing the $69,000 level. The CPI figure at 2.4% was a bit less than the forecast, and thus, investor sentiment got a boost, which consequently led to a rally in the crypto market.
Bitcoin’s Rally on CPI Data
The CPI report indicated that core inflation was at 2.5%, in line with the forecast, while the overall figure was 0.1% below expectations.
The news has led to speculation that the Fed may change its monetary policy stance and possibly even step down rate hikes. On the day, Bitcoin surged 4% to $69,190 on Bitstamp as traders positively reacted to the news.
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Market Reaction
The Kobeissi Letter stated that CPI inflation has now fallen to levels not seen for several years, with core CPI at its lowest point since March 2021. Nevertheless, the betting on Fed rate cuts remains slim, with the chance of a 0.25% cut in March being under 10%, as per CME Group’s FedWatch Tool.
Andre Dragosch, Bitwise’s European head of research, remarked that the CPI drop shouldn’t be seen as a surprise if inflation is considered from the perspective of alternative inflation metrics.
Also Read: BTC Struggles Amid US Inflation Data, Eyes $86,600–$115,040 Range
Technical Outlook
It is said that the watersheds levels, $ 68,000, $69,000 zone by traders is a crucial next move for Bitcoin. According to Michal van de Poppe, a higher low can be expected as he mentioned that BTC is still in a fragile but possibly momentum-driven area.
Daan Crypto Trades remarked that Bitcoin is coiling up in a falling wedge pattern, with its breakout move getting stopped at the $68K level.
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