Bitcoin (BTC) immediately pulled back on the latest data from the US Consumer Price Index (CPI) on February 10, causing an unexpected move that sent the bulls down.
Hourly BTC/USD light chart (Bit Mark). Source: Trading View
Look for a Bitcoin Bear Trap
Data from Cointelegraph Markets Pro and TradingView track BTC/USD as it dropped $1,800 after the CPI reached 7.5% in January.
Despite being 0.2% higher than expected, rising inflation has not had a positive impact on risky assets like Bitcoin in recent months.
Analysts argue that given the pace of year-on-year rate increases, the Fed may now have more incentive to start raising rates early.
US Consumer Price Index (CPI) results came in at 7.5% y/y, forecast was 7.3% y/y. “DXY is very high and risky assets such as bitcoin and stocks are coming down,” said Mikael van de Poppe, a Cointelegraph contributor.
“The probability that the Fed will start raising interest rates in March.”
Market, analyst, and trader Scott Melker, known as the “Wolf of All Streets,” was unaffected.
But for economist Lynn Alden, it was saving money with inflation that caused the real pain.
“Official inflation currently has the largest gap compared to short-term interest rates since 1951,” she noted alongside the graph.
“People who had cash in bank or treasury bills last year lost more than 7% of their purchasing power.”
A graph of the US Consumer Price Index versus the Federal Reserve’s effective interest rate. Source: Lyn Alden / Twitter
BTC price regains over $44,000.
Prior to that, trading on Wall Street had not yet begun on February 10, but Bitcoin not only recouped its losses, but also set an even higher peak of nearly $45,400.
Related Topics: Bitcoin Focuses Around $44K As BTC MACD Price Gives A Long-Awaited Bullish Signal
BTC/USD also avoided a retest of support recently, with $42,000 and below yet to see a retest.
Previously, Cointelegraph reported on potential resistance areas that the bulls must now contend with in order to continue rising.
“Bitcoin’s trend in the face of overall uncertainty is going to be very strong. It takes the narrative from TradFi’s court with BTC as a risky resource into a pure history of global adoption and subsequent game theory,” said analyst William Clementi on the same day.