Bitcoin fell 2.5% to $94,100 following the release of U.S. Consumer Price Index (CPI) data for January, which showed a year-over-year inflation increase of 3%, exceeding the forecasted 2.9%. The core CPI, which excludes volatile food and energy prices, rose 3.3%, also above expectations of 3.1%. The monthly CPI increase of 0.5% further accentuated persistent inflationary pressures, challenging market assumptions about easing price growth.
The inflation data triggered a sharp reaction in Bitcoin markets, with BTC dropping nearly $2,000 within minutes of the announcement. Bitcoin had been trading at $96,600 before the release but quickly declined to $94,100, marking its lowest level in nine days. The broader crypto market also faced downward pressure amid heightened concerns over macroeconomic conditions.
The CPI report has renewed speculation about the Federal Reserve’s monetary policy trajectory. While inflation has moderated from its 2022 peak, the higher-than-expected figures may limit the Fed’s ability to ease interest rates in the near term. This uncertainty has dampened risk appetite across asset classes, including cryptocurrencies.
Bitcoin’s decline aligns with its historical sensitivity to macroeconomic developments, particularly inflation data and Federal Reserve policy signals. As traders digest the implications of the CPI report, Bitcoin remains within a consolidation range between $90,000 and $110,000.
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