Bitcoin prices rose nearly 8% before falling to a 3.30% gain on Friday, nearing a two-month high following December inflation data as sentiment continued to improve in the cryptocurrency market.
Yesterday's inflation figures in the United States brought some positive surprises. Annual data showed the consumer price index (CPI/CPI) in December was 6.5%, down from 7.1% in November, while the core CPI (excluding food and energy) was 5.7%, in line with expectations and down from 6% previously . moon.
However, monthly data showed a -0.1% decline in CPI, compared to previous forecasts of 0% and 0.1%, marking the first drop in inflation in a year. Monthly core CPI was 0.3%, in line with expectations and up from the previous month.
In general, the data was close to expectations, but a simple confirmation of lower annual inflation and a small positive surprise in monthly inflation was enough to boost market confidence, benefitting Bitcoin and many other speculative assets.
Lower inflation leads to indications that the Fed may not need to raise interest rates as much as expected, which hurts the US dollar.
According to analysts, a look at the graph revealed that the cryptocurrency has indeed crossed its 100-day moving average, the psychological threshold of $18,000, and is above all the downtrend lines that have accompanied the fall since August 2022, thus forming 3 bullish technical signals for BTC.
At the same time there is also positive sentiment that a more optimistic economic outlook may cause Bitcoin to trend upwards. Some also refer to El Salvador's recent move to establish regulations governing digital assets and pave the way for its 'Volcano Bond'.
These Bitcoin-backed bonds will be used by Latin American countries to settle their obligations and finance the upcoming Bitcoin City.
BTC price is currently trading at the price level of $18,847.47.
