Key Points
- Bitcoin continues its upward trend despite a retreat in major equities following U.S. inflation data.
- Analysts do not expect U.S. Consumer Price Index (CPI) data to significantly impact crypto prices in the near future.
Bitcoin's value continues to rise, even as major stock indices experience a slight dip following the release of hotter-than-expected U.S. inflation data. This data has lessened the likelihood of the Federal Reserve implementing interest rate cuts in the near future.
Bitcoin and Inflation Data
Despite these developments, analysts do not anticipate the U.S. Consumer Price Index (CPI) data to bring an end to the current crypto bull market or to significantly affect prices in the coming weeks. They cite the strong bullish momentum currently present in the crypto market. Over the past 24 hours, the price of Bitcoin increased by 3%, with the cryptocurrency trading at $72,781 at 12:32 p.m. ET.
Meanwhile, major stock indices have seen a slight decrease over the past 24 hours. The S&P 500 is down 0.12%, and the Nasdaq Composite has slipped 0.6%. In early trading in New York, Nvidia shares fell by more than 3%, and shares of Meta and Apple dropped by 1% and 1.3%, respectively.
Market Reactions and Predictions
Markets are currently processing February's U.S. CPI report, which indicates that inflation remains persistently high. This could impact the Federal Reserve's willingness to start cutting rates. According to the CME's FedWatch tool, interest rate traders predict that the Fed will maintain steady rates in March and May before potentially implementing the first cut in June. However, the FedWatch forecast only gives a 58% chance of a rate cut in June, with over 35% of interest rate traders still betting on a rate pause that month.
Analysts predict that the market will adjust its rate cut expectations in 2024, from four to between two and three by the end of the year. They do not anticipate a significant sell-off for crypto as this repricing has occurred in the past few months without questioning the bull market consolidation versus significant sell-off. The GM 30 Index, which represents a selection of the top 30 cryptocurrencies, has increased by 3.02% to 159.46 in the past 24 hours.
