Bit price surged today. According to the US Consumer Price Index (CPI) data, March inflation eased to 2.4%, down from 2.8% in February.
The CPI data released on April 10th was lower than expected. Analysts had predicted March inflation would be 2.5%.
Inflation Easing, Bit Rises
The Consumer Price Index (CPI) is an important economic indicator measuring inflation. It tracks the average price changes consumers pay for goods and services. Lower-than-expected CPI figures can provide the momentum Bit needs. At the time of reporting, Bit was trading at $81,800, rising over 7% on the 24-hour chart.
In the US, CPI data is released monthly by the Bureau of Labor Statistics. This has become an event that particularly triggers significant market movements for Bit and other cryptocurrencies.
Bit is sensitive to macroeconomic indicators like CPI, which influence the Federal Reserve's monetary policy decisions. When CPI data shows rising inflation, the market typically anticipates interest rate hikes.
According to CME FedWatch data, the likelihood of a Federal Reserve rate cut in May dropped from 57% to 15%, due to Trump's 90-day tariff suspension and the newly released March FOMC meeting minutes.
This news provided relief for Bit, which was under pressure from US tariffs. Yesterday, Bit's price surged above $80,000 after Trump announced a 90-day tariff suspension for all countries except China.
However, high interest rates can strengthen the US dollar and make risk assets like Bit less attractive, potentially causing short-term price declines. Conversely, lower-than-expected inflation figures might suggest a more moderate Federal Reserve stance, which could increase investor interest in Bit as an alternative store of value.
Traders and institutional investors carefully observe CPI figures, adjusting their portfolios based on inflation trends and monetary policy expectations.
Additionally, Bit's appeal as an inflation hedge plays a psychological role. When CPI is high, some investors choose Bit as a defense against fiat currency's declining purchasing power. This could drive prices up in the medium to long term, despite short-term volatility.
