Bitcoin experienced a sharp decline today, falling from $96,600 to $94,088 following the release of higher-than-expected US inflation data. The drop highlights the cryptocurrency’s sensitivity to macroeconomic factors.
Inflation Surpasses Market Expectations
The January CPI report showed a 0.5% monthly increase, exceeding the forecasted 0.3%. Year-over-year inflation reached 3%, above the anticipated 2.9%. Core CPI, which excludes volatile food and energy prices, rose 0.4% monthly and 3.3% annually.
Market Impact Analysis
The inflation surprise triggered a broader market selloff. Stock futures dropped 1%. The 10-year Treasury yield jumped to 4.63%. The US Dollar strengthened by 0.5%.
Bitcoin’s reaction demonstrates its current classification as a risk asset. The cryptocurrency moves in tandem with traditional markets during periods of economic uncertainty.
Federal Reserve Implications
Markets now expect fewer rate cuts in 2025. Fed Chair Powell’s recent Congressional testimony supports this view. The central bank appears committed to maintaining higher rates until inflation reaches its 2% target.
Technical Outlook
Bitcoin faces immediate support at $94,000. A break below could test $92,000. The asset needs to reclaim $96,600 to resume its upward trajectory. Current price action suggests consolidation rather than a trend reversal.
Political Factors
Trump’s proposed tariffs on aluminum and steel imports add another layer of complexity. The tension between his push for rate cuts and the Fed’s inflation fight could increase market volatility.
Future Price Projections
Despite near-term pressure, some analysts remain bullish. CryptoQuant projects potential targets between $145,000 and $249,000. However, these estimates assume favorable political and economic conditions.
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Tags: Bitcoin, CPI Data, Federal Reserve, Crypto Markets, Inflation
Source: NewsBTC