Bitcoin and the crypto markets faced turbulence on January 12 following unexpectedly high US Consumer Price Index (CPI) data. Initially, Bitcoin fell by 2.1%, but it rebounded swiftly, evoking varied reactions among analysts and traders. The CPI rose 0.5% month-over-month, with annual inflation reaching 3.0%, surpassing forecasts.
On-chain analysis firm Santiment noted increased sensitivity among market participants to inflation news, citing a peak in CPI-related discussions on social channels. Despite concerns about Federal Reserve policy, Santiment suggests a bullish outlook as Bitcoin holder counts decline, indicating potential price hikes.
Tom Dunleavy of MV Global highlighted housing costs as a major CPI component, arguing that the current reading may not indicate a long-term trend. Attuned to social momentum, traders continue to ponder if this marks an inflationary shift or a data anomaly.
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