Bitcoin (BTC) May Benefit from Upcoming Inflation Data Despite Limited Bullish Rally Expectations

The latest analysis from CoinDesk highlights the implications of the forthcoming Consumer Price Index (CPI) data set to release by the U.S. Department of Labor. Scheduled for **Wednesday at 13:30 UTC**, this report is crucial for determining the trajectory of **risk assets** like **Bitcoin (BTC)**. Projections suggest a **0.3% increase** in January’s CPI, a slight deceleration compared to December’s 0.4% rise, with annualized inflation anticipated to hold steady at **2.9%**.

Market participants are closely monitoring this report, as a result lower than anticipated inflation could enhance prospects for **Federal Reserve (Fed)** interest rate cuts. Such developments would likely depress **U.S. bond yields** and weaken the **U.S. dollar**, ultimately fostering increased interest in **cryptocurrencies**. Notably, CME’s FedWatch tool indicates a **54% likelihood** of at least one rate cut this year.

However, while reduced rates could support BTC’s movement, analysts caution against expecting a significant price surge beyond the current consolidation zone of **$90,000 to $110,000**. This sentiment reflects broader economic challenges, including potential inflationary pressures and ongoing geopolitical tensions, demonstrating that the Fed’s room for aggressive policy shifts might be constrained.