Key Points
- Today, the CPI data for January will be released in the US, potentially affecting the markets.
- Bitcoin price surged above $96,000 today, following yesterday’s dip to $94,000 levels.
Today, Bitcoin’s price regained $96,000, following yesterday’s dip to $94,000 levels. The crypto market is eagerly expecting today’s CPI data, following yesterday’s Fed Chair’s testimony before Congress.
Bitcoin Trades Above $96,000
At the moment of writing this article, BTC is trading above $96,000, following a recent dip to $94,000 on February 11. The digital asset recorded a price drop from over $98,000 yesterday.
Today, Bitcoin doesn’t seem to continue its downward trajectory that debuted yesterday, with the overall crypto market lacking signs of panic ahead of today’s CPI data.
Later, the inflation numbers for January will be released in the US and the results could signal potential rate cut expectations.
As we previously noted, a stronger-than-expected CPI could reinforce the Fed’s cautious policy, while any signs of lowering inflation could hint at more rate cuts at the next FOMC meeting scheduled for March 19.
Markets’ State Ahead of Today’s CPI Data
Like the crypto market, Wall Street doesn’t show signs of panic as well with the volatility index (VIX) being anchored at 16, which suggests market participants have already bought protection against further negative news.
The Cboe Volatility Index (VIX) is a real-time market index that measures the expected 30-day volatility of the S&P 500 Index, and it’s often referred to as the “fear gauge” of the market.
Meanwhile, the crypto market’s Fear and Greed Index is currently in the “Fear” zone, but considering that Bitcoin is holding above $96,000 at the moment, there’s not too much panic in the market ahead of today’s important CPI data.
Yesterday’s market decline came amidst the Fed Chair’s testimony before Congress.
Jerome Powell’s Testimony: Rate Cuts, De-banking Issues and More
During his speech yesterday, Powell touched on various subjects including potential upcoming rate cuts and de-banking issues.
While reinforcing the Fed’s stance of adopting a “wait and see” approach before more rate cuts, he hinted at a potentially slower pace of cuts for 2025.
However, he highlighted that the Fed remains committed to the US people, and the economy has been making progress over the past two years, with lowering inflation.
He also addressed the unemployment rate which he called “steady”, saying that the labor market conditions have stabilized.
Regarding crypto, Powell also mentioned that the Fed will never create a CBDC, while at the same time acknowledging the growing number of cases of Bitcoin and crypto firms that were de-banked, promising to analyze the issue.
Powell Previously Showed Crypto Support
Powell recently said that banks can offer crypto services to people, bringing more optimism to the crypto industry regarding the overall adoption.
He also said that the US economy recorded a soft landing and it’s not in a recession. If this is the case, investors can continue injecting liquidity into the crypto market, sending prices higher.
If today’s CPI data shows lowering inflation, there will also be expectations of lower interest rates which translate into increased liquidity, and investors shifting money into BTC and crypto.
Overall, the crypto industry has enough reasons to remain optimistic for 2025, especially due to increasing adoption efforts, and continuous building.
