Bitcoin (BTC) increased volatility at the Wall Street open on Thursday as markets reacted to surprising US inflation data.
Key points:
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Bitcoin traders endure increased BTC price volatility as CPI surprises to the downside.
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US inflation unexpectedly falls to multi-year lows, fueling bets of interest rate cuts.
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Bitcoin price action continues to repeat its early 2025 fractal.
Bitcoin remains erratic after “massive” CPI drop
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD surpassed $89,000 before retreating lower.
The move came after the publication in November of the Consumer Price Index (CPI), which recorded one of its largest monthly falls since 2023, firmly against expectations.
“The all-items index increased 2.7 percent during the 12 months ending in November, after increasing 3.0 percent during the 12 months ending in September,” an official statement from the US Bureau of Labor Statistics (BLS) confirmed.
The BLS noted that the October CPI report was not released due to the government shutdown.
In reaction, the commercial resource La Carta Kobeissi led the surprise, suggesting that contrary inflationary signals could continue into the next year.
“This puts core CPI inflation in the US at its lowest level since March 2021,” he wrote in a post on X.
“Based on this data, inflation is now at its closest to the Federal Reserve’s 2% target since the pandemic. 2026 is going to be a wild year.”
Compared to the predicted 3.1% increase, the CPI had fallen short by a “huge amount,” continued cryptocurrency trader Daan Crypto Trades.
“Risk assets like $BTC are rallying thanks to this, combined with a big drop in dollar and bond yields,” an X post read.
“The three-month annualized CPI is now slightly above 2%. This should be very welcomed by the Federal Reserve. Further rate cuts are expected to be factored in following this data.”
Data from CME Group’s FedWatch tool puts the odds of a further interest rate cut at the Federal Reserve meeting on January 28 at 26.6%.
The next long-term BTC price floor?
As Cointelegraph reported, traders became suspicious of Bitcoin’s price action during this week and last due to “fakes” in either direction during the US trading sessions.
Related: Do bears take control below $90,000? 5 things you should know about Bitcoin this week
Accusations of market “manipulation” came as the BTC/USD pair hit liquidity walls both above and below, unable to sustain a new trend.
Total cryptocurrency liquidations over the 24 hours prior to the time of writing exceeded $630 million, according to CoinGlass.
As the rapid moves continued that day, cryptocurrency trader and entrepreneur Ted Pillows noted similarities to the beginning of the year.
“$BTC is mimicking the Q1 2025 fractal. What if this happens?” he asked next to a Bitcoin futures chart.
The chart implied another macro bottom for BTC/USD yet to come, similar to the one seen in early April when the pair briefly fell below $75,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness or reliability of the information contained in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness or reliability of the information contained in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
