Bitcoin saw a major new boost as the CPI data came in line with expectations – reducing the likelihood of the Federal Reserve tightening financial conditions.
Bitcoin ( BTC ) surged above $26,000 on March 14 as U.S. Consumer Price Index (CPI) data showed mixed inflation signals.
It surged above $26,000 on March 14 as U.S. Consumer Price Index (CPI) data showed mixed signals on inflation.
CPI pushes BTC price to 9-month high
Data from Cointelegraph Markets Pro and TradingView follows BTC/USD as it sees sudden volatility when the February CPI data is released.
Inflation rose 6% year-on-year and 0.4% month-on-month, both in line with expectations. Items excluding food and energy rose 0.5%, slightly higher than expected.
Bitcoin appears to have reacted positively to the data, which allows the Federal Reserve to walk the fine line between stumbling into more intractable inflation and avoiding raising interest rates amid the ongoing banking crisis.
Venturefounder, a contributing analyst at on-chain analytics platform CryptoQuant, said the market is now looking forward to a “turn” in rate hikes — a key positive for risk assets more broadly.
"Markets: Oh yes, big win against inflation! No more rate hikes, Fed to cut 50bps by end of 2023," he tweeted.
“If Powell changes the 2% inflation target, it would be the Fed’s biggest move to take the dollar off the gold standard since the 1970s.”
Still, trading resource Game of Trades believes that CPI is not low enough for the Fed to “aggressively” change its stance and actions in response to the March 2020 COVID-19 crash.
"When CPI hit 6%, consensus was confirmed. But it was not high enough to give the Fed room to intervene aggressively in the ongoing crisis, as it did during C19," one tweet read.
Volatility Continues as BTC Price Reaches $26,000
CPI is notorious for triggering unpredictable BTC price swings, so at the time of writing, the situation remains unclear as to where BTC/USD will move next.
Related: Bitcoin price nears $25,000 as analysts bet on CPI impact
Ahead of the CPI release, there is a significant amount of sell-side liquidity stalling at $25,000 and above; a primary target for bulls on the lower timeframes.
Bitcoin’s local high of $26,150 set a new record for 2023 — its best performance since June last year.
BTC/USD has broken above the crucial 200-period moving average, acting as resistance on the weekly timeframe.
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