Just when you thought it was safe to go back into the water, U.S. inflation data comes out hotter than a jalapeño, sending Bitcoin tumbling below the $95,000 mark. On February 12, just as Wall Street clocks started ticking, Bitcoin felt the heat, dropping to local lows around $94,100, according to TipRanks data. This dip follows a grim January CPI print that exceeded expectations, nudging the year-on-year increase to 3%, a tick above the forecasted 2.9%.
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Fed’s Hawkish Stance Chills Crypto Spirits
The U.S. Federal Reserve isn’t making things any easier. With inflation on the rise for four straight months, Jerome Powell’s recent testimony to the Senate hinted at a sterner stance on rate cuts. This pivot to a more cautious policy approach has put the brakes on hopes for rate cuts, with the CME Group’s FedWatch Tool now showing a measly 2.5% chance of a cut come March. The market mood? Expect higher rates to linger
Bitcoin Is at a Crossroads
As traders and algorithms recalibrate, Bitcoin struggles to find its footing. Skew, a popular trader, noted on X (formerly Twitter) that despite the selloff, there’s a chance for Bitcoin to bounce back if it can leverage the stacked bids that filled during the dip. However, resistance looms large at $96,690, and if Bitcoin can’t hustle past this hurdle, it might just confirm the bears’ picnic.
Today’s market reactions have painted a clear picture: higher inflation might just be the new normal, and rate hikes could be on the menu sooner than expected. For Bitcoin, this could mean retesting waters around the $90,000 mark as traders brace for a volatile journey.
At the time of writing, Bitcoin is sitting at $96,724.05.
