CPI Misses Expectations: Crypto Market Reacts, Bitcoin Drops 2.74%

The U.S. Bureau of Labor Statistics (BLS) has released the Consumer Price Index (CPI) for January 2025, providing valuable insights into inflation trends and potential shifts in monetary policies. These statistics have a direct impact on financial markets, including the crypto market.

The CPI for January 2025 rose by 0.1%, falling short of Wall Street's prediction of 0.3%. On a year-over-year basis, inflation stands at 2.9%. The core CPI, excluding food and energy prices, came in at 3.3%, higher than the previous 3.2% and significantly above the Federal Reserve's (FED) target of 2%.

These inflation numbers, along with remarks from the U.S. FED Chair Jerome Powell and any new updates on tariffs from the government, will play a crucial role in determining the direction of U.S. interest rates.

The crypto market has reacted negatively to the released numbers. The total market cap of the crypto business saw a change of -1.6%, while intraday trade volumes registered a difference of +3.93%. Leading cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and XRP experienced price changes of -2.74%, -3.27%, and -2.45%, respectively.

Crypto proponent Michael van de Poppe remains optimistic about the crypto market, despite the recent capitulation. He expects prices to gradually move upwards after some minor consolidation and a sideways trend.