COINOTAG News reports that the upcoming US January CPI data, set to release tonight, holds great importance for Bitcoin investors. A lower-than-expected CPI, particularly in the core metrics excluding food and energy prices, could indicate a potential shift in Federal Reserve monetary policy, possibly paving the way for interest rate cuts. Such a development may lead to a weaker US dollar, render US Treasury yields more appealing, and subsequently increase the appetite for riskier assets, including Bitcoin.
However, market participants should temper their expectations regarding a significant rebound in cryptocurrency values. While a decrease in the CPI might offer a brief rally, the broader economic context continues to exert greater influence. Analysts at CoinDesk caution that inflationary pressures remain a pivotal concern, with the Fed adopting a vigilant approach. Consequently, Bitcoin may only experience price fluctuations within the constrained range of $90,000 to $110,000, particularly if subsequent CPI figures exceed projections.