Bitcoin Set for Major Move as CPI Data Approaches

Bitcoin is currently consolidating within a price range of $90,000 to $110,000, and traders are closely watching the upcoming release of the U.S. Consumer Price Index (CPI) data, set to drop today at 13:30 UTC. The report is expected to show a modest 0.3% increase in January’s CPI, a slight decrease from December’s 0.4% rise.

This CPI reading is crucial because it will significantly impact the Federal Reserve’s future interest rate decisions. The CME’s FedWatch tool indicates a 54% chance that the Fed may reduce rates or leave them unchanged in 2025, depending on inflationary trends. If the CPI report comes in lower than expected, it could drive a drop in Treasury yields and weaken the U.S. dollar, both of which typically benefit riskier assets like Bitcoin. In this scenario, Bitcoin could break out of its current consolidation range and push higher.

Crypto analyst Martinez highlighted that Bitcoin’s accumulation trend score is near zero, indicating that the market is in a period of indecision and consolidation. A shift in demand—potentially triggered by the CPI data—could ignite a breakout or major price movement for Bitcoin.

While many are hopeful that a positive CPI report could lift Bitcoin, there are also concerns that inflation may be more persistent than expected. If inflation proves to be higher, the Fed may be less inclined to aggressively cut rates, potentially limiting Bitcoin’s upward momentum.

The upcoming CPI data is thus seen as a key catalyst for Bitcoin’s next move, with the potential to either ignite a breakout to the upside or maintain the consolidation pattern.