Bitcoin Drops Below $95K On Disappointing US CPI Data: Retail Sentiment Hits Year-Low
Synopsis
The hotter inflation print dampened investor expectations for Federal Reserve rate cuts, weighing on risk assets like Bitcoin.
Bitcoin’s (BTC) price fell below the key $95,000 support level on Wednesday as higher-than-expected U.S. inflation data rattled both crypto and traditional markets.
Ethereum (ETH) was down 2.4% trading at $2,500 levels, while Ripple (XRP) tumbled 3.4% to $2.38.
The Consumer Price Index (CPI) rose 0.5% in January, exceeding forecasts of 0.3% and accelerating from December's 0.4% gain.
Core CPI, which strips out food and energy costs, increased 0.4% for the month, higher than the anticipated 0.3% and December's 0.2%.
Year-over-year, core CPI stood at 3.3%, surpassing forecasts of 3.1% and December's 3.2% reading.
The hotter inflation print dampened investor expectations for Federal Reserve rate cuts, weighing on risk assets like Bitcoin.
After already trending downward this week, Bitcoin’s price took a sharp dive following the disappointing report as the total cryptocurrency market value dipped by 3.7% in the last 24 hours.
On Stocktwits, retail sentiment around Bitcoin deteriorated to ‘extremely bearish’ from ‘bearish’ a day ago – marking a year-low for the apex cryptocurrency’s ticker on the platform – as chatter remained at ‘low’ levels.
Some users highlighted the irony of Bitcoin, once viewed as an inflation hedge, now weakening on hotter-than-expected price data.
Others speculated that more downside could follow when the Producer Price Index (PPI) data is released on Thursday.
Bitcoin has remained rangebound between $90,000 and $109,000 for over two months.
Concerns over artificial intelligence (AI)-driven risks from China, potential trade wars, and persistent inflation—leading to expectations of higher-for-longer interest rates—have kept prices in check.
While Bitcoin’s price more than doubled in value over the past year, its gains for 2025 remain limited to just 1% so far.
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Read also: BNB Defies Crypto Market Decline Amid Binance-SEC Legal Time-Out But Retail Still Turns Bearish
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