Bitcoin, Ether Little Changed Before U.S. Inflation Report

Bitcoin and ether showed little movement ahead of the release of the U.S. inflation report. Market participants are closely watching the CPI data to gauge the Federal Reserve's policy direction. The outcome could influence risk appetite and liquidity flows into crypto assets.

The U.S. CPI is a critical indicator for the Fed's interest rate decisions and impacts Bitcoin's price. A hotter-than-expected reading could delay rate cuts, strengthen the dollar, and weigh on Bitcoin's price. Conversely, a cooler reading may support a rally in BTC.

Thailand has taken a regulatory step forward by recognizing digital assets as legitimate investment instruments. The Cabinet approved digital assets for derivatives contracts, integrating them into the country's regulated financial framework. This marks a structural shift in capital markets and aligns Thailand with global financial standards.

Why the Move Happened

Bitcoin's price is highly sensitive to U.S. macroeconomic data, particularly inflation. The previous CPI report had a notable impact on BTC/USD movements, with sharp price swings following the release. Market sentiment is currently bearish, with Bitcoin falling below $67,000 and ether dropping to below $2,000 according to market data.

Short positions on centralized crypto exchanges have surged to their most aggressive levels since August 2024. This indicates traders are heavily positioned for downside moves. If prices stabilize or rally, a short squeeze could trigger a significant upward move.

How Markets Responded

Crypto-related stocks were dragged down by Bitcoin's and ether's declines. Coinbase and Bullish both fell in pre-market trading, with Robinhood reporting a 38% drop in fourth-quarter crypto earnings. The broader CoinDesk 20 index dropped 3.7%.

Derivatives data show extended deleveraging in Bitcoin futures, with negative funding rates and elevated options skew signaling defensive positioning. Market participants are preparing for potential volatility, particularly if the CPI data triggers sharp price movements.

UBS increased its holdings in BlackRock's iShares Bitcoin Trust, valued at $27.2 million as of December 31, 2025. The position reflects growing institutional interest in crypto through regulated ETF instruments. This move aligns with the bank's strategy of structured exposure to digital assets.

What Analysts Are Watching

Analysts are monitoring the U.S. CPI data for its potential to trigger sharp price movements in Bitcoin and altcoins. A hotter-than-expected report could push BTC toward $60K, while a cooler reading may send it toward $70K. Wall Street estimates suggest CPI will be around 2.5% year-over-year.

The CME FedWatch tool indicates a nearly 95% probability that the Fed will keep rates at 3.50%-3.75% in the near term. The nomination of Kevin Warsh as the new Fed Chair adds long-term uncertainty for Bitcoin. Institutional 'buy-the-dip' orders are concentrated near the $60K level, which could influence the market's reaction to the CPI data.

The Thai SEC will now revise the Derivatives Act to include digital assets and carbon credits as approved underlying variables. This reform positions Thailand as a more progressive jurisdiction in Asia for crypto derivatives integration, potentially accelerating institutional engagement.