January US CPI data will be released today. Will this trigger a Bitcoin and altcoin rally? BTC price is pinned below $100,000 – let’s check it out.
Bitcoin and top altcoins like Dogecoin, BNB, and Cardano are sliding, pushing the total crypto market cap to $3.2 trillion, down 4.6% in the past 24 hours.
According to Coingecko, Bitcoin is below $96,000, down nearly 3% in the past week. Technically, most coins are under pressure and choppy ahead of the release of the Consumer Price Index (CPI) report for January later today.
Traders are bracing for market volatility after this release, with most hoping that Bitcoin will edge higher, possibly lifting sentiment and triggering the altcoin season.
Economists expect the core CPI to rise by 0.3% in January 2025, higher than the 0.2% it rose in December 2024. At the same time, they predict that the CPI will rise to 2.9% over the last year.
(Source)
Bank of America (BoA) analysts predict a 0.3% MoM increase in core CPI, with headline inflation rising to 0.27% MoM, pushing the annual inflation to 2.8%, down from 2.9%.
Why is CPI Data Important?
Whether the January 2025 CPI reading will be in line with their expectations, exceed their forecasts, or come in lower, the crypto market will react accordingly.
How Bitcoin performs in the New York session will set the tone for how altcoins will trend. From the daily chart, if prices rally, breaking $100,000, it will be highly likely that altcoins like Solana and Cardano will follow.
SOL may break $200, and Cardano could reclaim $1 as capital flows back to the otherwise “risky and volatile” markets.
If data shows that the United States economy is heating up and inflation is rising, Bitcoin, being a disinflationary asset for preserving value, will benefit. Other safe havens like gold might also push above immediate resistance levels.
Over the years, the Federal Reserve (Fed) has insisted that it is data-driven. In addition to labor market conditions, the Fed is closely monitoring inflation.
(Source)
Jerome Powell and the FOMC raised rates aggressively in 2022 to tame rising inflation. As the reading is now near their benchmark of 2%, the central bank is keen on holding rates and even slashing them some more in Q1 2025.
If rates fall, inflation could rise, and this will be when the reading is extremely sensitive to tariffs and other economic policy shifts President Donald Trump plans to implement. How the January 2025 CPI reading will be will, therefore, influence how the Federal Reserve decides on interest rates.
In the last FOMC meeting, Chair Jerome Powell emphasized that while inflation is down and near the 2% target, it remains elevated. Accordingly, they will continue closely monitoring economic data as these readings shape their interest rate decisions.
Leveraged Bitcoin, Altcoin Traders Liquidated
The uncertainty around the CPI data report is why prices are mostly down and choppy. As mentioned earlier, Bitcoin trades below $100,000, and volumes across exchanges remain subdued.
The sideways chop has seen over $224 million of leveraged positions liquidated across multiple exchanges, mainly Binance and OKX. From Coinglass, most of these positions were longs ($174 million).
(Source)
Over $42 billion of Bitcoin positions were forcefully closed, though there was a notable spike in liquidations from Layer ($27.59 million). More than 119,000 traders were liquidated, with one trader on Bybit losing $1.97 million to the exchange.
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