Disappointing U.S. CPI Figures Lead to Bitcoin Plummeting Below $95K.

U.S. Inflation Surges Unexpectedly in January, Dragging Markets Down and Pushing Bitcoin Below $95K

Inflation in the U.S. surged faster than expected in January, sending both cryptocurrency and traditional markets into a sharp decline.

The Consumer Price Index (CPI) increased by 0.5% in January, surpassing the forecasted 0.3% rise and the 0.4% increase seen in December. Year-over-year, CPI rose 3.0%, exceeding the expected 2.9% and matching December’s result.

Excluding food and energy, the core CPI rose by 0.4% in January, higher than the 0.3% expected and the 0.2% rise in December. On an annual basis, core CPI climbed 3.3%, surpassing the forecasted 3.1% and December’s 3.2%.

Bitcoin (BTC), already in a downward trend this week, plummeted below $95,000 following the release of the disappointing inflation data. The CoinDesk 20 Index, which tracks the largest cryptocurrencies by market cap, dropped by 2.9% over the last 24 hours.

U.S. stock index futures fell approximately 1% in response, while the 10-year Treasury yield increased by 10 basis points to 4.63%. Gold dropped more than 1%, and the dollar index rose 0.5%.

Bitcoin, which briefly exceeded $100,000 after Donald Trump’s election win in November, has since been stuck in a range between $90,000 and $109,000 for more than two months. Concerns over AI issues in China, trade tensions, and the impact of higher interest rates amid persistent inflation have all contributed to this rangebound trading.

Federal Reserve Chairman Jay Powell, speaking before Congress yesterday, reiterated that additional interest rate cuts are unlikely unless there is an unexpected economic downturn or inflation relief.

With today’s inflation data, markets may begin factoring in the possibility of rate hikes in 2025, which could push Bitcoin lower, potentially revisiting the $90,000 area.