As forecast estimates were outpaced across the board by U.S inflation data, the price of Bitcoin plummeted below $95,000 around the open of Wall Street trading on February 12th. Bitcoin joined the sell-off of risk assets and experienced new local lows of $94,091 on Bitstamp, due to surprising data from the Consumer Price Index (CPI).
Data from the U.S Bureau of Labor Statistics (BLS) indicated that the CPI saw an unexpected rise of 0.5% last month, a concerning increase of 0.2% more than predicted, marking the highest CPI inflation reading since June 2024. This notable surge led to trading resource, The Kobeissi Letter, asserting that inflation in the U.S is “HOT”, and predicting further delay in rate cuts.
Latest estimates from the CME Group’s FedWatch Tool reaffirm these predictions by showing bets on the Federal Reserve cutting interest rates at its next meeting in March have sharply decreased to just 2.5%. The market now views higher rates as likely to persist for years to come due to these recent data shifts.
Amidst these economic developments, Bitcoin attempted a modest recovery as Wall Street returned, but remained in a struggle within the mid-$90,000 zone as buyer interest is considered. Some traders anticipate an attempt to bounce, spurred by filled stacked bids during the sell-off. However, concerns linger, with other traders warning of a critical “do or die” moment, and identifying $96,690 and $93,630 as important short-term resistance and support levels, respectively. This analysis points to a decisive move back above the last swing high at $96,690 as a sign of strengthening, ideally prompted by impulsive price behavior.