US CPI Rises 0.5% in January, Triggering Market Dips and Bitcoin’s Price Decline

US CPI Rises- Bitcoin Dips Below $95K as Inflation Data Drives Market Downturn: What’s Next for BTC?

US CPI Rises– U.S. inflation unexpectedly surged in January, causing a sharp decline in both cryptocurrency and traditional financial markets. According to the latest Consumer Price Index (CPI) data, inflation rose 0.5% in January, surpassing expectations of a 0.3% increase. The year-over-year CPI also came in higher than anticipated at 3.0%, versus the forecasted 2.9%. Core CPI, which excludes volatile food and energy prices, climbed 0.4% month-over-month, exceeding the predicted 0.3%.

Bitcoin Drops Below $95,000 Amid Inflation Data

The CPI report immediately impacted markets, with Bitcoin (BTC) experiencing a significant pullback. After reaching the $100,000 mark following the U.S. elections in November, Bitcoin has since traded within the range of $90,000 to $109,000. Following the inflation data, Bitcoin slumped below $95,000. The broader crypto market, represented by the CoinDesk 20 Index, saw a 2.9% drop in the last 24 hours.

Stock Markets and Treasury Yields Respond to Inflation Data

Stock futures in the U.S. also reacted negatively to the news, falling about 1%. Meanwhile, the 10-year Treasury yield rose by 10 basis points, reaching 4.63%. Gold dipped by more than 1%, and the U.S. Dollar Index surged by 0.5%, signaling a risk-off sentiment in the broader markets.

Inflationary Pressures and Bitcoin’s Future Outlook

Bitcoin’s performance has been influenced by inflationary pressures, with concerns over AI-driven China issues, trade wars, and interest rates contributing to its price fluctuations. Federal Reserve Chairman Jay Powell testified that rate cuts are unlikely unless there is an unexpected downturn in the economy or inflation. This inflation data could set the stage for markets to price in future rate hikes, which might lead Bitcoin to revisit the $90,000 level in the near future.

As market sentiment reacts to the new inflation data, Bitcoin’s movement could face further volatility in the coming weeks. Investors should stay alert for any signs of further weakness in Bitcoin’s price, particularly if the $90,000 support level is tested again.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.