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Key Insight:
- The Bitcoin price could rally $10K if U.S. inflation data surprises the downside.
- CPI report expected at 2.9% YoY, but real-time data suggests faster cooling.
- Bitcoin eyes $105K target, with gold and futures data supporting a breakout.
Bitcoin price could rally by $10,000 if U.S. inflation data rises to the downside. The 10x Research head of research suggested this, Markus Thielen.
On February 11, he noted that a lower-than-expected Consumer Price Index (CPI) print on February 12 could defy expectations. This could further push the Bitcoin price higher.
Bitcoin’s Reaction to CPI Data
The U.S. Bureau of Labor Statistics will release January’s CPI report on February 12 at 13:30 GMT. The report is expected to show a year-on-year increase of 2.9%, matching December’s reading.
However, the core CPI, excluding volatile food and energy prices, is predicted to remain at 3.1%. It was still above the Federal Reserve’s 2% target.
TD Securities analysts expected core CPI to accelerate in January after a softer-than-expected 0.23% month-on-month gain in December. They pointed to seasonal Q1 price resets, particularly in the services sector, as a factor.
The Fed maintained a hawkish stance at its January 28-29 meeting. The organization has stated that it will only contemplate rate decreases. It will do this if it observes meaningful progress in inflation or labor market weakness.
Thielen noted that most market participants have expected inflation to remain at 2.9%. At the same time, the Truflation Inflation Index, a real-time inflation tracker, has dropped from 3.0% to 2.1%. This further suggested that the inflation may be cooling faster than expected.
“If CPI surprises to the downside at 2.7% or 2.8%, Bitcoin could see a relief rally,” he said.
The Bitcoin price surged in January after inflation data came in lower than anticipated. Markets had priced in a third consecutive month of rising CPI. However, when inflation remained at 2.9%, BTC jumped by $10,000.
Bitcoin Could Hit $105K if Rally Continues
Markus Thielen of 10x Research expects Bitcoin price to rise another $10,000, reaching $105,491. This was just 3.5% below its all-time high of $109,000 on January 20.
However, the rally in January stalled after U.S. President Donald Trump imposed tariffs on Canada, Mexico, and China.
The BTC was trading at $96,118, recovering slightly. The Ichimoku Cloud showed resistance at $98,270 and $100,331. A breakout above these levels could push prices higher.
BTC has been consolidating under a descending trendline. However, a breakout with stronger RSI momentum could support a rally. According to CoinMarketCap, the Bitcoin price was up 0.34% on the day but down 2.65% over the past week.
Bitcoin-Gold Correlation Strengthens Bullish Case
Crypto analyst Michaël van de Poppe expected Bitcoin to hit a new all-time high within 2-3 weeks, citing gold’s recent strength. He noted that gold has been on an upward streak.
This could surpass its all-time high in late January and continue its momentum into February. Gold traded above $2,900 per ounce at press time, marking seven consecutive weeks of price appreciation.
Both assets have demonstrated correlated price movements in the past. Analyst Daink pointed out that while gold has been pushing new highs, Bitcoin has lagged.
However, the Bitcoin price has historically caught up with gold after such decouplings. This suggested that it may be due for a rally.
Into the CryptoVerse founder Benjamin Cowen conducted a poll on X. There, he asked if the Bitcoin price would go after the CPI release. Of 12,397 respondents, 51.7% predicted an upward move.
Bitcoin Futures Show Bullish Reversal
Beyond macroeconomic factors, on-chain data suggested that Bitcoin’s futures market could be regaining bullish momentum. Per ShayanBTC, the taker buy-sell ratio, a key metric tracking market order imbalances, has reversed after a prolonged decline.
The 14-day moving average of this ratio has started trending upward. This indicates that buyers are regaining control of the futures market.
If the ratio surpasses 1.0, it would confirm an influx of buying pressure, potentially fueling a stronger rally. This shift in futures positioning aligned with the broader market expectations of Bitcoin breaking past its current range.
This can especially be seen if CPI data reinforces bullish sentiment. With multiple indicators turning positive, analysts anticipate that the Bitcoin price could reclaim its previous highs. Moving ahead, it could set new records in the coming weeks.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
