Those Waiting for US Inflation for Bitcoin Rise May Be Disappointed! - Coin Bulletin

Bitcoin investors expect a positive impact with the inflation to be announced in the US, but analyst Omkar Godbole suggests that those with this expectation may be disappointed.

The United States will announce the Consumer Price Index (CPI) data for January on Wednesday at 16:30 GMT. A slight decrease is expected in the monthly inflation rate, rising by 0.3% from the 0.4% level in December. It is anticipated to remain at 2.9% on an annual basis. Core inflation is expected to rise to 0.3% monthly, declining to 3.1% annually. These data will play a critical role in determining the Federal Reserve's (Fed) interest rate cut expectations.

May not affect the Fed's decision

If the inflation data falls below expectations, expectations that the Fed may cut interest rates could strengthen. A low interest rate environment is generally seen as a positive development for risky assets such as Bitcoin. However, analysts do not expect such a development to trigger a major rally in Bitcoin. Major investment banks such as BlackRock and RBC believe that inflation will not fall to a level that would force the Fed to cut interest rates.

Federal Reserve Chairman Jerome Powell emphasized last week in his speech to Congress that they will not rush for an interest rate cut. According to RBC's weekly note, it is not expected that the January inflation data will show a significant decrease in price pressures. BlackRock also stated that persistent inflation in the service sector will force the Fed to pursue a high-interest rate policy for a longer period.

Bitcoin may continue to stay in a tight range

According to analysts, Bitcoin is currently trapped in the range of 90,000 to 110,000 dollars, and it seems difficult to break out of this range if the inflation data does not create a surprise. If inflation comes in higher than expected, it may bring Bitcoin closer to 90,000 dollars, and the Fed's reluctance to cut interest rates further. However, it is thought that the market needs a stronger catalyst for a significant drop or rise.