Bitcoin’s price tumbled below the $95,000 mark following unexpectedly high U.S. inflation data for January 2025. The cryptocurrency market reacted sharply to the Consumer Price Index (CPI) report, which showed inflation rising faster than anticipated.
Inflation Numbers Exceed Expectations
The January CPI data revealed a 0.5% monthly increase, surpassing the predicted 0.3% rise. Year-over-year inflation reached 3.0%, higher than the forecasted 2.9%. Core CPI, which excludes volatile food and energy prices, rose 0.4% monthly and 3.3% annually.
Market Impact and Bitcoin’s Response
Bitcoin’s price movement reflects growing concerns about persistent inflation. The cryptocurrency has maintained a trading range between $90,000 and $109,000 since Trump’s election victory in November. Several factors influence this consolidation phase:
- Continued inflationary pressures
- AI-driven concerns about China
- Potential trade war impacts
- Higher interest rate environment
Federal Reserve Stance
Fed Chairman Powell’s recent Congressional testimony suggests a cautious approach. The central bank appears unlikely to implement rate cuts soon. This stance could impact crypto markets in several ways:
- Extended high-interest rate environment
- Reduced liquidity in financial markets
- Potential pressure on risk assets
Technical Analysis
Bitcoin’s price action shows significant support around the $90,000 level. The recent drop below $95,000 might test this support zone. Key technical levels to watch:
- Major support: $90,000
- Resistance: $100,000
- Secondary resistance: $109,000
The current market conditions suggest a period of consolidation might continue. Traders should monitor inflation data and Fed statements for potential market direction.
Tags: Bitcoin, Inflation, Federal Reserve, Cryptocurrency Markets, Technical Analysis
Source: CoinDesk