CPI’s Soaring Momentum Cools Down, Bitcoin Dips Below the 50,000 Mark
Last night, the US announced that the January Consumer Price Index (CPI) was 3.1%, higher than the economists’ forecast of 2.9%. This has dampened market optimism for future interest rate cuts, pushing up bond yields and causing the three major US stock indices to decline. Bitcoin briefly fell below $49,000, while Ether also briefly dropped below $2,600.
Contents:
Toggle
Expectations for interest rate cuts cool down, US bond yields soar
BTC briefly falls below $49,000, ETH falls below $2,600
Last night, the US announced that the January CPI, which had slowed down from the previous month’s 3.4% to 3.1%, still exceeded economists’ forecast of 2.9%.
According to CME Group’s FedWatch, the market no longer expects an interest rate cut in March, with the probability of a rate cut in May dropping to 62.1% and to 55.8% in June. This indicates that the market expects the Federal Reserve to have only limited space for a rate cut before June.
US bond prices have also dropped significantly as a result, with the yield on 10-year bonds surging by 14 basis points to 4.315%.
Bitcoin had briefly surpassed the $50,000 level in the past two days, reaching a high of $50,368, marking a near two-year high.
However, after the release of the CPI data yesterday, Bitcoin also plummeted, briefly falling below $49,000 to $48,300. As of the time of writing, it has returned to $49,520.
Ether, on the other hand, has shown relative weakness, with its recent high of $2,686 failing to surpass the mid-January level of $2,717. It briefly fell below $2,600 last night and is currently trading at $2,629.
BTC: Bitcoin
CPI: Consumer Price Index
ETH: Ether
Further reading:
EigenLayer, the re-opened collateralization project, accepts collateralization until February 9, with a Total Value Locked (TVL) exceeding $3 billion.
The Ethereum upgrade, Cancun, successfully goes live on Sepolia, with the final testnet, Holesky, launching on February 7.
