Bitcoin sags as inflation worries return to crypto markets on the back of a grim January CPI print.
Bitcoin
BTC $96,109 dipped below $95,000 around the Feb. 12 Wall Street open as US inflation data beat estimates across the board.
Bitcoin joins risk-asset sell-off as CPI surprises
Data from Cointelegraph Markets Pro and TradingView showed new local lows of $94,091 on Bitstamp.
The January print of the Consumer Price Index (CPI) was higher than expected on both monthly and yearly timeframes.
Data from the US Bureau of Labor Statistics (BLS) confirmed that CPI rose 0.5% last month, a conspicuous 0.2% more than anticipated. The year-on-year increase was 3% versus a forecast of 2.9%.
“Headline CPI inflation is up for 4 straight months and Core CPI is officially back on the rise again. Inflation in the US is HOT,” trading resource The Kobeissi Letter wrote in part of a response on X.
“This officially marks the highest CPI inflation reading since June 2024. Even more concerningly, headline CPI inflation rose by +0.5% MoM, a massive jump. Rate cuts will be delayed even further.”
The latest estimates from CME Group’s FedWatch Tool thus showed bets on the Federal Reserve cutting interest rates at its next meeting in March, dropping sharply to just 2.5%.
Traders additionally lowered the likelihood of cuts coming in the first half of 2025, instead favoring October as the next date for policy easing.
“From there, the market does not see another rate case until DECEMBER 2026,” Kobeissi continued.
“The market effectively sees higher rates for years to come amid the recent data shifts.”
BTC price at “critical juncture”
Bitcoin sought a modest rebound as Wall Street returned, still struggling in the mid-$90,000 zone as analysis weighed buyer interest.
“Interesting day ahead post higher than expected inflation,” popular trader Skew wrote in part of his latest X post on Binance order book liquidity.
“Stacked bids were filled in this sell off thus far, could see an attempt to force a bounce later in the day.”
Skew acknowledged that there was “plenty of liquidity” between the current spot price and the range lows at $90,000.
Others were more nervous, with fellow trader Crypto Chase warning of a “do or die” moment and confirming buys set for the low $80,000 area.
Trading channel More Crypto Online meanwhile flagged $96,690 and $93,630 as important short-term resistance and support levels, respectively.
“Critical juncture – A decisive move back above the last swing high at $96,690 would strengthen the case for the yellow scenario, ideally with impulsive price behavior. Conversely, a sustained drop below $93,630 would favour continued downside in the white structure, turning the support zone into resistance,” it wrote in an X post.
“While I currently lean toward the yellow scenario, confirmation of a bottom or failed breakdown is still needed to adopt that view with confidence.”
Source: Cointelegraph