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With the release of the U.S. Consumer Price Index (CPI) approaching, whether the pace of easing inflation meets market expectations is expected to serve as the pivotal moment determining Bitcoin’s breakout above $70,000.
According to cryptocurrency-focused media outlet BeInCrypto on March 11 (local time), the U.S. Bureau of Labor Statistics is set to announce the February CPI on Wednesday. The market expects the February CPI to rise 2.4% year-over-year, maintaining the same level as in January. On a monthly basis, prices are projected to increase by 0.3%, slightly faster than January’s 0.2%, but analysts believe the overall stabilization trend toward the Federal Reserve’s 2% target will continue.
Core CPI, which excludes volatile food and energy prices, is forecast to rise 2.5% year-over-year and 0.2% month-over-month. Although West Texas Intermediate (WTI) crude oil prices surged past $110 per barrel following a joint U.S.-Israel strike on Iran on February 28, the full impact of that spike is unlikely to be reflected in February’s figures. As a result, some observers caution that the market reaction may be more limited than expected.
An analyst at TD Securities assessed that the latest data will demonstrate a gradual decline in services inflation, thereby reinforcing the Federal Open Market Committee’s (FOMC) confidence. While the ISM Manufacturing Prices Paid Index jumped sharply to 70.5, adding pressure, this has been offset by a decline in the services index. Experts suggest that if core inflation eases to around 0.23% month-over-month, expectations for an interest rate cut could strengthen further.
Depending on the inflation data, Bitcoin (BTC) faces two extreme scenarios: reclaiming the $70,000 level or testing support at $60,000. If inflation comes in lower than expected, a strong bullish rally could propel Bitcoin past $70,000. Conversely, if the figures exceed forecasts, there is a risk that prices could retreat to the $60,000 range. On-chain data also indicates that whale investors have been accumulating major assets such as Chainlink (LINK) in anticipation of volatility.
The Federal Reserve is expected to determine the direction of future monetary policy based on this inflation report. The market is already pricing in a high likelihood of a rate pause, and if the data does not deviate significantly from expectations, an orderly price correction could be followed by renewed upward momentum. The cryptocurrency market, including Bitcoin, is likely to remain highly sensitive to macroeconomic indicators, navigating a period of heightened short-term volatility while seeking a longer-term upward trajectory.
*Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on this information. The content should be interpreted for informational purposes only.*