Bitcoin Poised for Potential Rally If US CPI Data Surprises to the Downside

Bitcoin Poised for Potential Rally If US CPI Data Surprises to the Downside

Market analysts anticipate no major changes in the upcoming US Consumer Price Index (CPI) report. However, a lower-than-expected inflation print could serve as a catalyst for Bitcoin’s next upward move, according to 10x Research’s Head of Research, Markus Thielen.

Lower CPI Could Trigger a Bitcoin Surge

In a market report published on February 11, Thielen noted that most traders expect the U.S. Bureau of Labor Statistics to report a 2.9% year-over-year (YoY) inflation rate on February 12.

However, real-time data from the Truflation Inflation Index suggests inflation may be cooling faster than anticipated, having dropped from 3.0% to 2.1%. This divergence raises the possibility of a lower-than-expected CPI print, potentially coming in at 2.7% or 2.8%.

“A softer CPI reading could spark a relief rally for Bitcoin,” Thielen explained, adding that similar market reactions have occurred in the past.

Bitcoin’s January Surge Was Driven by CPI Expectations

Thielen pointed to Bitcoin’s sharp price increase in January as a precedent. At the time, traders had braced for a third consecutive month of rising inflation, but when the CPI print held steady at 2.9%, market sentiment shifted, fueling a $10,000 rally that briefly pushed Bitcoin above $100,000.

That momentum, however, was short-lived after former U.S. President Donald Trump announced new tariffs on Canada, Mexico, and China, which put downward pressure on the market.

Could Bitcoin Reach New Highs?

If Bitcoin experiences a similar $10,000 surge following the CPI report, it could climb to $105,491, bringing it within striking distance of its all-time high of $109,000, which was briefly reached on January 20.

As of publication, Bitcoin is trading at $95,490, down 2.65% over the past seven days, according to CoinMarketCap.

Sentiment among traders remains mixed but leans bullish. A poll conducted by Into The CryptoVerse founder Benjamin Cowen on February 11 found that 51.7% of 12,397 voters believe Bitcoin’s price will rise after the CPI release.

Meanwhile, MN Capital founder Michaël van de Poppe recently suggested that Bitcoin could hit new all-time highs in the coming weeks, pointing to gold’s recent streak of record-breaking performances as an indicator of growing investor interest in safe-haven assets.