YEREVAN (CoinChapter.com) — Bitcoin (BTC), the largest cryptocurrency by market capitalization, has seen significant selling, falling from the $50,000 level following the latest Consumer Price Index (CPI) report for January 2024. A newly released report showed further selling. – Higher-than-expected US inflation rate. Core CPI, which excludes volatile food and energy prices, hit a 40-year high, indicating continued inflationary pressures.
These developments have raised concerns about the possibility of the Federal Reserve extending its hawkish monetary policy, which generally reduces the attractiveness of risky assets such as cryptocurrencies.
Latest CPI report for January 2024
According to the latest report, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3% on a seasonally adjusted basis and rose another 3.1% over the past 12 months without seasonality.
Moreover, indices for all items except food and energy rose 0.4% in January (seasonally adjusted) and rose 3.9% year-on-year without seasonally adjustment.
The report also detailed changes in various categories. For example, the food index showed notable gains in January, with the eating out index increasing 0.5%.
However, energy prices showed a downward trend, with the energy index falling 0.9% in January. Specifically, the gasoline index fell 3.3% in the same month.
The latest core CPI figures hit a 40-year high. But some analysts were quick to point out that the Fed will still raise borrowing rates in May, regardless of the report’s numbers.
Republican Florida Governor Ron DeSantis fiercely criticized price increases in response to a hotter-than-expected Consumer Price Index (CPI) report.
“We asked people where it really mattered. They bite people for shelter, they bite people for movement, and they also bite people for food. “That’s stock.”
He said this before welcoming tax reform in the state.
Bitcoin price took a hit.
Analysts who closely watch inflation numbers had predicted a slight slowdown. However, real-world data shows that inflation remains a major concern, with core inflation rates excluding the volatile food and energy sectors rising higher than expected.
Immediately the cryptocurrency market reacted, noting a sharp decline in the value of Bitcoin. After the CPI report was released, the BTC price fell nearly 3% to its lowest level since mid-September.
The price drop below $48,500 comes a day after the largest cryptocurrency reached the long-awaited milestone of reaching the $50,000 mark.
The sell-off highlights the market’s sensitivity to macroeconomic indicators and central bank policies, which have a significant impact on investor sentiment and asset valuations.