Bitcoin demonstrated resilience after the latest US Consumer Price Index (CPI) data sparked market volatility. The leading cryptocurrency briefly dipped to $94,250 before staging a strong recovery to $98,100.
CPI Data Exceeds Expectations
The US inflation rate hit 3.0% annually, surpassing the expected 2.9%. Core CPI reached 3.3%, indicating persistent inflationary pressures. The data triggered immediate market reactions.
Market Response and Analysis
On-chain analysis firm Santiment noted record-high social media discussions about CPI. This shows heightened market sensitivity to inflation data. The firm sees the dip as a potential buying opportunity.
Several factors support this bullish outlook:
- Declining Bitcoin holder counts signal a contrarian buy indicator
- Quick price recovery suggests strong underlying demand
- Housing costs, which drove the CPI increase, use lagged data
Technical Perspective
Bitcoin’s swift recovery from $94,250 shows strong support at these levels. The price action forms a potential bull flag pattern. Key resistance sits at $98,500, while support holds at $94,000.
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Future Implications
The Federal Reserve’s response to inflation data will shape market direction. Their November 2024 pause on rate cuts suggests caution. However, experts view housing-driven inflation as less concerning due to data lag.
Bitcoin trades at $96,028 at press time. The market shows strength despite macro uncertainties. Institutional interest remains robust.
Tags: Bitcoin, CPI Data, Market Analysis, Federal Reserve, Crypto Trading
Source: NewsBTC