Bitcoin has consolidated in a range 10%-15% below record highs as investors tempered expectations for further interest rate cuts. Although headline inflation rose by 0.4% in December, year-over-year core CPI unexpectedly declined to 3.2%, which contributed to a bullish sentiment and led Bitcoin's price to increase by about $1,500 to $98,500 shortly after the CPI report's release. This follows a more volatile January for Bitcoin, which saw it dip below $90,000 earlier in the week. Traditional markets reacted positively as well, with U.S. stock index futures adding around 0.5% following the inflation data. Policymakers are focused on the core pace of inflation due to its persistence, which complicates rate cut expectations amidst stronger-than-expected economic indicators. Overall, the market sentiment shifted towards buying, buoyed by favorable economic indicators and the unexpected core CPI decline.

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