Bitcoin (BTC) Price Reacts to Inflation Data
The price of Bitcoin (BTC) experienced a slight decline following the release of the U.S. Bureau of Labor Statistics’ consumer price index (CPI) data for January, which showed higher inflation than expected. As a result, the S&P 500 Index saw a sharp correction, marking its worst performance on a CPI day since September 2022.
Bitcoin (BTC) Price Remains Steady
Despite the turbulence in global markets caused by the inflation report, Bitcoin has displayed remarkable resilience. Tony Sycamore, a market analyst at IG Australia Pty, acknowledged Bitcoin’s ability to withstand the deteriorating risk sentiment. However, he also mentioned the possibility of a 10% correction and a dip below $40,000.
Bitcoin has gained support from various factors, including the introduction of dedicated U.S. exchange-traded funds (ETFs) for the cryptocurrency. These ETFs have attracted significant inflows since their launch in January. Additionally, anticipation for the upcoming Bitcoin halving in April has contributed to bullish sentiment.
The Future of BTC
On-chain data provider Santiment reports that the recent BTC price reversal has led to polarized sentiment among investors. This shift in sentiment is expected to become increasingly divided as market movements continue.
Santiment analysts predict that the mild retracement could result in significant fluctuations in sentiment, with the potential for panic selling followed by dip-buying strategies. However, they also note that previous CPI reports have coincided with mid-term turnarounds in the crypto market, suggesting broader shifts may be on the horizon despite short-term fluctuations.
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