Bitcoin Faces CPI Shock—Research Firm Says ‘Buy The News’

Bitcoin and the wider Crypto markets were confronted with a shock on January 12 after the latest US Consumer Price Index (CPI) data is in hotter than expected. The shock sent Bitcoin briefly down before he bounced back, which divided a series of reactions among traders and analysts.

The American Bureau of Labor Statistics has released figures that show a month-over-month increase in the CPI of 0.5%, so that annual inflation is placed at 3.0%-the previously expected 2.9%. In the meantime, core CPI (excluding volatile food and energy costs) grew by 0.4% monthly-over month, with an annual percentage of 3.3% and consensus predictions surpassed in a similar way.

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Shortly before the data went live, Bitcoin saw a rapid decrease from -2.1% to $ 94,250, some of which speculate market observers, linked to traders or insiders who overflow with an early hint of inflation. However, the decline turned out to be temporary; Prices came back to highlights of $ 98,100 when delivered retail traders looked at the market reaction.

A ‘buy the news’ event for Bitcoin?

Santiment, an analysis company on chains, weighed on volatility in a Blog post Dated 13 February. In an update entitled “CPI who takes the eye of the crowd …”, Brian Quinlivan, Director of Marketing at Santiment, noted that market participants have become acutely sensitive to inflation news, especially given the unrest of recent years.

With reference to a highest point of 15 months in CPI-related discussions via social channels such as X, Reddit, Telegram, 4chan, Bitcointalk and Farcaster, Santiment emphasized the size of traders: “Initially, just before the CPI report became Announced, Bitcoin briefly drops to $ 94,250 Before you have recovered, some large insiders were who received the prices in advance. . ”

The function further explained that the shock of this CPI release has restored the fears that have been linked to policy changes in Federal Reserve. After reducing the rates during 2023 and 2024, the FED abruptly stopped cutbacks in November 2024.

Santiment warns that this can indicate a long -term period without additional rate reductions: “Now that inflation figures are worrying high in the US, many predict that it will take quite a long time before we see further cuts, which traditionally benefit the markets. The speed rises in 2022, which were largely attributed to the massive crypto correction, are still fresh in the memories of people. “

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Despite the prospect of extensive monetary tightening, Santiment has a potentially contrary signal that involves Bitcoin Holder counts, already a decrease in the total holders of the Bitcoin network, and this is generally a bullish signal. An ideal scenario would be that small traders react exaggerated to this news, so that whales and sharks can create more coins and raise prices. Based on the early price rebounds after the news, this can be adjusted to be a rumor, to buy the news ‘scenario’.

Marketworkers outside of santiment have also introduced. Tom Dunleavy, partner at MV Global, also offered an optimistic view of the data, in particular the role of reception costs: “The most important motivation of this hot CPI print was housing (1/3 of headline and 40% of core inflation) . This lecture stays behind for almost a year. Nothing to worry about, because more real -time lectures show the accommodation to fall on large markets, “he noticed via X.

For many traders, the burning question remains: will this “hot” CPI reading mark the start of a new inflato trend – or is it just a grill of delayed data? Santiment’s suggestion of a possible “sale of the rumor, buy the news” Dynamics again how quickly sentiment can shift in a cryptomarkt that is often driven by Momentum and Social Consensus. In the meantime, Dunleavy’s home -oriented demolition underline that the head of the inflation balls can be misleading without dissecting the underlying components.

At the time of the press, BTC traded at $ 96,028.

Featured image made with dall.e, graph of tradingview.com