Bitcoin’s price retreated below $95,000 as January’s US Consumer Price Index (CPI) data came in hotter than expected, showing persistent inflationary pressures that could impact Federal Reserve policy decisions.
CPI Data Exceeds Expectations
The January CPI increased 0.5% month-over-month, above the forecast 0.3%. Year-over-year inflation hit 3%, surpassing December’s 2.9% reading. Core CPI, excluding food and energy, rose 0.4% versus an expected 0.3%.
Market Impact Analysis
The crypto market responded swiftly to the inflation data. Bitcoin’s price action suggests investors remain sensitive to macro factors. The leading cryptocurrency has consolidated between $95,000-$108,000 over the past two months.
Institutional adoption continues to grow despite short-term volatility. Public companies now hold $55 billion in Bitcoin, a five-fold increase from 2023. This indicates strengthening fundamental support despite price fluctuations.
Long-term Outlook
ARK Invest maintains an optimistic long-term view, projecting Bitcoin could reach:
- Base case: $710,000 (40% CAGR)
- Bear case: $300,000
- Bull case: $1.5 million (58% CAGR)
Technical Analysis
Bitcoin’s current price action shows a consolidation pattern near key support levels. The $95,000 mark represents a crucial psychological level. A break below could test support at $92,000, while sustained trading above $98,000 could signal renewed upward momentum.
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The higher-than-expected inflation data presents both challenges and opportunities for crypto investors. While short-term volatility may persist, institutional adoption and technical indicators suggest a resilient market structure.
Tags: Bitcoin, Inflation, CPI Data, Crypto Markets, Price Analysis
Source: NewsBTC