In January, prices rose by 0.3% compared to December, according to the consumer price index (CPI). The overall value of the cryptocurrency market has reached $1.87 trillion, marking a 3.66% rise in the last day alone.
On Tuesday evening, big digital currencies went up in value. This happened because the U.S. inflation was higher than expected, making people less hopeful about the possibility of interest rates going down.
Cryptocurrency Market and Inflation Data Impacting Stocks
The largest cryptocurrency, Bitcoin, saw a slight decline of about 1% to $49,500 after briefly surpassing $50,000 earlier in the day.
In January, the consumer price index (CPI) rose by 0.3% compared to December, with a yearly increase of 3.1%. Economists had expected a monthly increase of 0.2% and a yearly rise of 2.9%.
Core prices, which exclude volatile food and energy components, increased by 0.4% monthly and 3.9% annually. The global cryptocurrency market cap reached $1.87 trillion, reflecting a 3.66% rise in the past day.
Stocks declined as hotter-than-expected inflation data boosted Treasury yields. The Dow Jones Industrial Average dropped by 1.35% to close at 38,272.75, the S&P 500 fell by 1.37% to 4,953.17, and the Nasdaq Composite decreased by 1.8% to settle at 15,655.60.
Following the CPI release, the 2-year Treasury yield exceeded 4.66%, and the 10-year yield surpassed 4.32%.
Bitcoin Correction and Analyst’s Insights
Cryptocurrency analyst Michael Van de Poppe notes a slight correction in Bitcoin’s price following the higher-than-expected CPI.
Van de Poppe emphasizes that while inflow into Bitcoin is positive, it doesn’t guarantee an endless upward trajectory. He suggests that as long as Bitcoin maintains a price above $46,000, the overall trend remains upward. Additionally, he highlights a positive development: the ETH/BTC pair is showing signs of bouncing upward.
Potential Bubble and Price Predictions
The analyst raises the possibility of a “crypto dot-com bubble” scenario unfolding in the digital asset market. Despite this cautionary note, Van de Poppe predicts significant potential for Bitcoin’s price to surge due to widespread adoption. He suggests that Bitcoin could rally to well above $500,000, with potential peaks at $250,000 or even $600,000.
#Bitcoin correcting slightly after CPI came out (higher than projected).
Inflow is great, but it's not a guarantee that it will go up endlessly.
As long as #Bitcoin stays above $46K, trend remains up.
Good sidenote: ETH/BTC bouncing upwards. pic.twitter.com/gK3j54iGPi
— Michaël van de Poppe (@CryptoMichNL) February 13, 2024
Bitcoin’s Technical Analysis by Analyst Ali Martinez
Cryptocurrency analyst Ali Martinez has highlighted an ascending triangle formation in Bitcoin’s lower time frames.
#Bitcoin appears to form an ascending triangle on the lower time frames. This technical formation suggests $BTC is poised for a 1.60% in the short-term.
Watch out for the $50,200 resistance and the $50,000 support!
If you’re planning to join me in this trade, go to @coinexcom,… pic.twitter.com/Jtb8Eedbtq
— Ali (@ali_charts) February 13, 2024
Martinez suggests that this technical pattern indicates a potential 1.60% increase in Bitcoin’s price in the short term. According to Martinez, traders should pay close attention to two crucial levels: the resistance at $50,200 and the support at $50,000. These levels could significantly influence Bitcoin’s price movement.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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