Bitcoin Faces CPI Shock—Research Firm Says ‘Buy The News’
Bitcoin and the broader crypto market faced a shock on January 12, after the latest U.S. Consumer Price Index (CPI) data was hotter than expected. The shock caused Bitcoin to bounce down briefly and then bounce back, sparking a series of reactions between traders and analysts.
U.S. Bureau of Labor Statistics Release the numbers CPI’s monthly over-month growth was 0.5%, with annual charges of 3.0% – 2.9% expected. Meanwhile, Core CPI (excluding volatile food and energy costs) grew by 0.4% per month to 3.3% annually, also surpassing consensus forecasts.
Related Readings
Shortly after the data went live, Bitcoin quickly fell -2.1% to $94,250, and some market observers speculated that this could be related to traders or insiders who received prompts of outdated inflation. However, the recession proved temporary. Prices rebounded to $98,100 as worried retailers watched the market reaction.
Bitcoin’s “buy news” campaign?
Santiment is a chain analysis company Blog Posts The date is February 13th. In an update titled “CPI that attracts crowds”, Santiment Marketing Director Brian Quinlivan pointed out that market participants are already very sensitive to any inflation news, especially given the turmoil in the past few years.
Santiment cited 15-month highs of CPI-related discussions on social channels such as X, Reddit, Telegram, 4Chan, BitCointalk and Farcaster, highlighting the magnitude of traders’ concerns: falling to -2.1% to $94,250 before a slight recovery . This is likely to be a wind that has caused high inflation news ahead of schedule by some large insiders. However, the price quickly returned to $98,100 as the retail industry showed concern. ”
The post further explained that the shock from this CPI release has sparked concerns related to changes in the Fed’s policy. After lowering rates throughout 2023 and 2024, the Fed suddenly stopped further cuts in November 2024.
Santiment warns that this could mean long periods without additional slowdowns: “Now, inflation in the United States is high, and many people predict that we will see a long period of time. Further cuttingtraditionally benefited the market. The rate of 2022 is largely attributed to large-scale cryptographic corrections, but it is still fresh in people’s memory. ”
Related Readings
Despite the prospects Extended currency tighteningSantiment observed potential counter-trend signals involving the number of Bitcoin holders: “We have seen a decline in total holders on the Bitcoin network, which is usually a bullish signal. Ideally, small traders don’t respond Overdoing it allows whales and sharks to scree out more coins and make prices soar. According to early price rebounds after news, this could be a “selling rumors, buying news “scene”.
MV Global partner Tom Dunleavy also provided optimism about the data, noting in particular the role of housing costs: 40% of title and core inflation). This book is far behind by nearly a year. Don’t worry, more real-time readings show that houses falling in major markets are flat. ” he said in X.
For many traders, the burning problem remains: Does this “hot” CPI reading mark the beginning of a new inflationary trend, or is it just a quirk of delaying data? Santiment’s recommendations on “sell rumors, buy news” reflect a rapid shift in sentiment in ways that are often driven by motivation and social consensus in the cryptocurrency market. Meanwhile, Dunleavy’s housing-centric breakdown emphasizes that the title inflation quantity can be deceptive without the need to dissect the basic components.
At press time, BTC was trading at $96,028.
Featured Images created with dall.e, Charts for TradingView.com
