Crypto market participants are closely watching upcoming US inflation data, expecting that a potential drop in the Consumer Price Index (CPI) might trigger a rise in Bitcoin's value.
Inflation Forecasts and Impact on Bitcoin
According to Markus Thielen, head of research at 10x Research, a 2.9% year-on-year inflation rate is expected in the US Bureau of Statistics report. However, the real-time Truflation Inflation Index has shown a decline from 3.0% to 2.1%, suggesting that inflation pressures might be easing faster than anticipated. "If CPI surprises to the downside at 2.7% or 2.8%, Bitcoin could see a relief rally," Thielen noted.
How Lower Inflation Could Affect the Market
Earlier in January, when market participants anticipated a third consecutive month of rising CPI, the unexpected 2.9% figure led to a $10,000 surge in Bitcoin’s price, pushing it above the key $100,000 level. However, tariffs imposed by former President Donald Trump against Canada, Mexico, and China temporarily halted this momentum.
Bitcoin Price Predictions
If Bitcoin were to undergo a similar rally, its value could reach $105,491, bringing it close to its all-time high of $109,000, briefly reached on January 20. At the time of publication, Bitcoin was trading at $95,490, down 2.65% over the past seven days, according to CoinMarketCap. Many analysts, including Michaël van de Poppe, believe Bitcoin could hit new all-time highs within weeks.
While the market awaits inflation data, analysts suggest being prepared for a potential crypto market surge driven by decreasing inflation pressures.
