Today's release of US inflation data for January exceeded expectations, leading to a decline in Bitcoin and other cryptocurrencies.
Impact of Inflation on Crypto Market
Following the higher-than-expected inflation data, Bitcoin prices fell by about 3% in 15 minutes to $94,100. Altcoins like Ethereum and Solana also followed suit, dropping to $2,600 and $193 respectively. Amid the current inflation, markets have adjusted the timing of the expected interest rate cut from September to December. According to CME FedWatch, 97.5% of investors predict the Fed will hold rates steady at its next meeting in March.
Critical Point for Bitcoin
Amid the released inflation data, Bitcoin reaches a critical point. Analysts indicate that breaking the $92,000-$94,000 support could trigger a massive sell-off. Adam, a macro researcher at Greeks.Live, notes investors are closing long positions amid weak price trends, maintaining a bearish market sentiment.
Bitcoin's Recovery Potential
Despite current challenges, analysts observe positive signs for Bitcoin's future potential. Notably, between the current levels and $98,000, there are large buy orders totaling 900 BTC, indicating a possible rapid recovery amidst low volume and high volatility.
Thus, inflation data has exerted significant pressure on cryptocurrencies, but conditions remain for Bitcoin's recovery assuming support holds.
