At 9:30 Beijing time, the United States announced the December CPI, which was 6.5%, which was completely in line with expectations. The Bitcoin market also fluctuated violently with the US stock market before and after the data was released, with a short-term amplitude of 2.69%. The amplitudes of various copycats were also quite large. Let's take a look at the significance of this data for the Bitcoin market.
First, the CPI data fell for the sixth consecutive month, the smallest increase since October 2021. Secondly, the data was in line with expectations, which directly increased the possibility that the Fed would only raise interest rates by 25 basis points in February, providing room for the Fed to slow down the pace of interest rate hikes. In other words, there is no substantial negative external conditions for Bitcoin in the next half month. The only interest rate hike can be regarded as a positive at present. Of course, the sharp fluctuations before and after the release of the interest rate hike data are inevitable. However, this is only for high-multiple contract players, and spot players can completely ignore this fluctuation.
One chart shows the impact of the 2022 CPI data release on Bitcoin
Basically, if the published value meets expectations, it will rise, and if it is higher than expectations, it will fall. In the past year's bear market, virtual currency players have been deeply affected by core data such as US non-farm payrolls, CPI, PCE, and interest rate hikes. In theory, these data only affect US stock indicators. With the entry of various institutions, BTC has been following the US stock index in the past two years. People in the circle jokingly call BTC just a technology stock on Nasdaq. However, there is no doubt that the recent two rounds of Bitcoin's bull market are inseparable from the ten-year bull market of the US stock market. There are pros and cons. The fundamental reason is that it is in a bear market cycle. There are these data in the bull market, but the impact is negligible. It is difficult for us to pay attention to these data. Even if the data is ugly, the bull market trend will be pulled back. It is worth mentioning that with the deepening of the bear market, these data have gradually lost long-term control over Bitcoin. They often fluctuate before and after the announcement. After the announcement, no matter whether the data is good or bad, Bitcoin will continue to follow its original trend. This is a good thing. Excluding external factors, slowly building a bottom is the real bottom. Of course, it may be better if external factors bring a black swan to accelerate the bottom. All in all, everything is moving towards the positive side in 2023, maybe we have passed the darkest moment, right?
The above content is purely entertainment and does not constitute investment advice
