The CPI Data Caused a Slight Bitcoin Volatility
US CPI data came in higher than expected, which caused a strong reaction in the markets. Bitcoin reacted by falling 6% before continuing its climb to new highs.
According to the U.S. Bureau of Labor Statistics, consumer price index (CPI) data for February came in above expectations, with an increase of 0.4%. On a year-on-year basis, inflation increased to 3.2% from the previous month's 3.1%, as well as from expectations of 3.1%. The high level of inflation remains a concern for market participants, as it raises questions about the Federal Reserve's future policy decisions.
According to investors' predictions, the Fed will continue to keep the interest rate at the same level in March and May, and a possible rate cut will take place in June. Other experts believe that it is too early to talk about a rate cut, as the fight against inflation is far from over.
Thought inflation was gone?
— The Kobeissi Letter (@KobeissiLetter) March 12, 2024
WOW. On a 3-month annualized basis, Supercore inflation jumped a whopping 6.9% in February.
Core services less shelter inflation is a key metric that the Fed follows, also known as Supercore inflation.
In January, this metric jumped by 0.7%… pic.twitter.com/FS8Ev3ktRA
Before the publication of fresh inflation data, Bitcoin managed to reach an all-time high, briefly crossing the $73,000 mark. However, the first reaction of the major cryptocurrency was a sharp drop of 6% to the $68,660 mark.
At the time of writing, Bitcoin has resumed its growth, reaching a new high of $73,600.
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A low was formed near $68,660 and the price started to grow again. The bulls managed to break the resistance levels near $71,000, $72,000 and $73,000. They were close to the resistance level of $74,000, however, the price pulled back slightly.
A clear move above $73,000 will take Bitcoin to the psychological level of $75,000 in the near term. On the negative side, Bitcoin will test the $72,000 and $71,000 support levels. A major support level remains at $70,000.
This is not a 100 percent statement. The cryptocurrency market is very volatile. Investors should exercise caution.
