Bitcoin (BTC) To Regain Bullish Momentum Before January US CPI Data?
Bitcoin Inflation Data: The crypto market gained bullish momentum with recent interest rate hike that came out on expected lines. However, robust employment growth led to fears of tightening in monetary policy as the Fed continues to insist on containing inflation at 2% target. Meanwhile, the crypto prices found stability at the current levels in January 2023, at the back of a tough year all through 2022. In this context, the U.S. Bureau of Labor Statistics will release the January CPI inflation data on February 14.
Inflation Likely Rose In January?
In a worrying trend, revised consumer price readings showed increase in inflation than expected all through the last quarter. In December 2022, inflation rose by 0.1% as opposed to the expected reduction by same margin. Similarly, revisions of CPI numbers in prior months — October and November — also edged higher than expectations. Experts feel this trend could mean it is more likely that inflation will rise in the coming months. This situation could go either ways for the crypto market, as the supply dynamics favor both rise and fall of CPI Index.
If consumer prices go up in the US, investors could bet on cryptocurrencies as a means of hedge against rising costs. On the other side, rising inflation is directly proportional to reduced capital flow into the crypto market. As per Reuters survey, CPI could go up by 0.4% month-on-month in January while the core CPI would rise by same margin. While the crypto market was bullish ahead of the December CPI data release, it was a mixed reaction after the numbers were out.
