"BTC has gone up a lot, the price must be taking a break."
The price of cryptocurrency king Bitcoin (BTC) fell back below $49,000 as the release of Consumer Price Index (CPI) data for January 2024 showed inflation eased to 3.1% from 3.4%, but still higher than the expected 2.9%.
Following that, crypto market participants currently see a 34% chance of the Federal Reserve (Fed) cutting interest rates in May 2024.
Lower chances of an imminent interest rate cut weighed on traditional markets as the 10-year US Treasury bond yield fell 12 basis points while S&P 500 equities and the Nasdaq Composite Index slipped 2%.
Due to the CPI data, US-listed crypto-focused stocks also declined as the market opened, with shares of Coinbase (COIN) and MicroStrategy (MSTR) down 3% while BTC miners Marathon (MARA) including Riot Platforms (RIOT) respectively decreased by 5% and 2%.
According to Craig Erlam, senior analyst at online brokerage platform OANDA said traders are now only set on three 75 basis point interest rate cuts for 2024, however concerns about inflation may turn pessimistic*.
*Tend to see the worst side of things or believe that the worst will happen
Although the crypto market seemed overly optimistic last month, Erlam who still sees big progress on inflation has expected more unexpected situations in the coming months.
As of this writing, the price of BTC has plunged by 1.19% to $49,504 in the last 24 hours with a market cap of $971 billion but is still up 14.73% over the last week.
