Bitcoin (BTC) ramped up volatility into Thursday’s Wall Street open as markets reacted to surprise US inflation data.
Key points:
Bitcoin traders weather more snap BTC price volatility as CPI surprises to the downside.
US inflation unexpectedly drops to multiyear lows, fueling bets of interest-rate cuts.
Bitcoin price action continues repeating its early 2025 fractal.
Bitcoin stays erratic after “massive” CPI miss
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD passing $89,000 before reversing lower.
The move followed the November release of the Consumer Price Index (CPI), which printed one of its largest monthly declines since 2023 — firmly against expectations.
“The all items index rose 2.7 percent for the 12 months ending November, after rising 3.0 percent over the 12 months ending September,” an official statement from the US Bureau of Labor Statistics (BLS) confirmed.
The BLS noted that October’s CPI report was not issued due to the government shutdown.
Reacting, trading resource The Kobeissi Letter led the surprise, suggesting that contrarian inflation signals could continue into next year.
“This puts Core CPI inflation in the US at its lowest level since March 2021,” it wrote in a post on X.
“According to this data, inflation is now at its closest point to the Fed's 2% target since the pandemic. 2026 is going to be a wild year.”
Versus the anticipated 3.1% increase, CPI had come in short by a “massive amount,” crypto trader Daan Crypto Trades continued.
“Risk assets like $BTC are rallying on the back of this, combined with a large fall in the dollar and bond yields,” an X post read.
“The 3 month annualized CPI is now just slightly over 2%. This should be very welcomed by the Fed. More rate cuts are expected to get priced in following this data.”
Data from CME Group’s FedWatch Tool put the odds of a fresh interest-rate cut at the Fed’s Jan. 28 meeting at 26.6%.
New long-term BTC price low next?
As Cointelegraph reported, traders were suspicious of Bitcoin price action through this week and last due to “fakeouts” in either direction during US trading sessions.
Related: Bears take over below $90K? 5 things to know in Bitcoin this week
Accusations of market “manipulation” came as BTC/USD hit walls of liquidity both above and below while failing to sustain a new trend.
Total crypto liquidations for the 24 hours to the time of writing were over $630 million, per CoinGlass.
With the snap moves continuing on the day, crypto trader and entrepreneur Ted Pillows eyed similarities to the start of the year.
“$BTC is mimicking the Q1 2025 fractal. What if this plays out?” he queried alongside a chart of Bitcoin futures.
The chart implied another macro bottom for BTC/USD still to come, similar to that seen in early April when the pair briefly dipped below $75,000.
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