CPI Data Today: Bitcoin Price Faces Uncertainty as Inflation Trends Evolve

The post CPI Data Today: Bitcoin Price Faces Uncertainty as Inflation Trends Evolve appeared first on Coinpedia Fintech News

Bitcoin (BTC) is currently moving between $90,000 and $110,000, unable to break out of this tight range. Despite attempts to rise, the Bitcoin price remains under pressure due to economic uncertainties, particularly around U.S. inflation and Federal Reserve policies. 

In the last 24 hours, Bitcoin’s market cap also dropped to $1.9 trillion. Fed’s hawkish comments crashed the market last year but Bitcoin recovered to some extent in January after Trump’s inauguration and Bitcoin reserve plan gaining spotlight in the US. Investors have mixed sentiment at present but largely the market is waiting for stable crypto rules to see a full fledged rally. 

Here’s the key insights which can decide the Bitcoin fate. 

Key Events on the Roll

The U.S. will release its January Consumer Price Index (CPI) report soon, showing how much prices have gone up. If the report shows lower inflation, Bitcoin could get a small boost as investors feel more confident. The CPI is expected to show a 0.3% rise from last month, slightly lower than December’s 0.4%. Core inflation, which ignores food and energy prices, might rise by 0.3%, up from 0.2% in December.

While this sounds positive, it may not be enough to send Bitcoin soaring. Investors are waiting to see if this soft inflation report will convince the Fed to cut interest rates, which would be good for Bitcoin. However, that’s unlikely to happen soon.

The Fed’s Tough Stance Is Holding Bitcoin Back

The Fed plays a big role in Bitcoin’s price movements. Even if inflation cools down, the Fed isn’t in a hurry to cut interest rates. Fed Chair Jerome Powell

Jerome Powell

Jerome Hayden “Jay” Powell is an American attorney and investment banker who has served since 2018 as the 16th chair of the Federal Reserve

Finance

recently said they’re not planning quick rate cuts. Big financial firms like BlackRock and RBC also believe the Fed will keep rates high this year.

According to the CME FedWatch tool, there’s only a 54% chance the Fed will cut rates even once this year. Without these cuts, Bitcoin struggles to gain strong upward momentum because higher interest rates make traditional investments more attractive compared to crypto.

A crypto analyst, Neil Sethi highlighted that the probability of a rate cut by June has dropped below 50% to 48%, while the chance of two cuts in 2025 has fallen to 42%. Plus, there’s now a 20% chance of no rate cuts being priced in, down from around 50% after the January FOMC meeting.

Also Read :   Trump’s Plan to Appoint a16z’s Brian Quintenz to CFTC—What to Expect   ,

Future Inflation Worries Add More Pressure

On top of this, markets expect inflation to rise again in the future. Data from Mott Capital Management shows that two-year inflation expectations have climbed to 2.8%, the highest since early 2023. This means people think prices will keep increasing, making it even harder for the Fed to lower interest rates soon. Trade tensions and possible new tariffs are also adding to inflation fears. 

If the upcoming inflation report shows higher-than-expected numbers, Bitcoin could drop toward the lower end of its range. If inflation is lower, Bitcoin might see a small rally. However, without clear signs that the Fed will cut rates soon, Bitcoin is likely to stay stuck in its current range for now.