Hassan Maishera
TL;DR
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BTC briefly dipped below $94k on Wednesday as headline and core rates of inflation rose faster than expected in January.
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It has now recovered nicely and is currently trading above $96k.
BTC Dips to $94k on CPI News
The cryptocurrency market experienced volatile price action on Wednesday as BTC and other major coins reacted to US inflation data. The U.S. CPI came in faster than expected, at 0.5% in January. The year-over-year rate was 3% versus an anticipated 2.9%.
Furthermore, the core CPI, at 0.4% monthly and 3.3% year over year, was higher than analysts expected, and the inflation rate did not cool at the expected rate.
The news saw Bitcoin react negatively, dropping sharply to the $94k region within minutes, losing 2.9% of its value.
The move also affected other risk-based assets like Gold, which dipped 1% following the news. However, the 10-year Treasury yield jumped 10 basis points to 4.63%. The rising inflation levels could affect the Fed’s interest rate cuts this year, resulting in Bitcoin and other major cryptocurrencies underperforming.
Bitcoin has since recovered from the dip, surging past $97k before slightly retracing to now trade at $96,061 per coin. Ether, the second-largest cryptocurrency by market cap, added nearly 3% to its value and is approaching the $2,700 mark.
Binance’s BNB token is the best performer among the top 10 cryptocurrencies by market cap, up 10% in the last 24 hours. At press time, BNB is trading at $702 per coin. BNB’s positive performance comes from investors focusing on tokens on BNBChain.
Meanwhile, SUI has overtaken Avalance’s AVAX token to become the 11th-largest cryptocurrency by market cap. The total cryptocurrency market cap is up 1.1% and stands at $3/18 trillion.
