As US inflation rates slowed, Bitcoin prices skyrocketed. After the US Department of Labor released January consumer price data in America, its cost surged by a whopping $600 – from an original value of $21.6 thousand to an awe-inspiring figure at $22.2 thousand! It’s clear that digital currencies have become increasingly desirable, and this impressive spike proves it!
On February 14th, the US experienced its lowest inflation rate since October 2021 – an annualized growth of 6.4%, down from January’s 6.5%. Experts weighed in on the current crypto market and predicted its upcoming performance with informed speculation.
Some Analysts Are Hopeful For Bitcoin
On Valentine’s Day, the US was presented with a surprise in the form of higher-than-expected inflation data. The Consumer Price Index (CPI) slowed to 6.4% instead of its anticipated 6.2% due largely to a 10% surge in gasoline and oil futures prices. As these figures were revealed, Bitcoin (BTC) remained fairly steady despite anticipation from traders that it would shoot up accordingly.
Unlike their counterparts on the stock market, cryptocurrencies showed a calmer performance. BTC firmly held its base at $21.5 thousand before skyrocketing to over $22 thousand, where it was fixed for some time. Although volatility spiked during this period, prices remained steady between $21.5 and 22.5 thousand – not as extreme as many had anticipated!
As the halving date draws nearer, Bitcoin’s correlation to other indices will start to decline. Traditionally, around eight months before the halving event, BTC sees a full-blown bull market emerge. With no negative news circulating in the crypto space, there is potential for BTC to break through resistance at $22.5 thousand and go on an upward trajectory towards $23-$23.5K – potentially even reaching as high as 25K!
On the Other Hand, Some Think that Bitcoin will Bottom Out with the Interest Rate Hikes
For years, the price of Bitcoin has mirrored that of US stocks. However, during this past week, it dropped to $21 thousand, while other digital currencies experienced a decline of as much as 10%. This is an expected crypto market adjustment – after five consecutive weeks of growth, investors are now cashing out their profits which in turn affects cryptocurrency values.
Moreover, factors such as the uncertain global economy and a possible Fed rate hike that followed last week’s meeting caused cryptocurrencies to plummet. Now inflation data in the United States has revealed dismal results with 6.4%, which is higher than what was anticipated at 6.2%. This certainly hasn’t helped further any regained confidence in crypto markets.Regulatory approval of an increased rate, which is anticipated to exceed the current 0.25 percentage points by a staggering 0.5 percentage points, has further emboldened investors in their hypothesis that this will be the cause for the index’s next downturn followed by Bitcoin slipping beneath $20K per coin once more.
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