Bitcoin Price Bounces Down After Disappointing CPI Figures: Now It's Getting Exciting Again

The price of Bitcoin (BTC) has just fallen sharply when the new inflation figures were announced in the United States. The crypto currency has fallen 1.50 percent in value in a very short time as fears of interest rate hikes increase again. As a result, it moves onto slippery ice again.

In the run-up to the consumer price index (CPI), Bitcoin slowly crept up, but at 2:30 pm the price went down in a bad way.

In less than a quarter of an hour, Bitcoin crashed from $83,800 to a low of $82,570. Gold also received the full blow with a fall of more than 1.60 percent.

Headline inflation came in at 3.7 percent, while 3.6 percent was expected. It marks the third highest CPI print since September 2023.

More than half of that monthly increase is due to energy: petrol became 9.1 percent more expensive and fuel oil, including diesel, even 15.3 percent.

But core inflation also disappoints with a price increase of 2.6 percent, while 2.5 percent was expected. The central bank can still see through an oil shock, but inflation will become more persistent if core inflation also rises. The probability that the central bank will raise interest rates again this year has therefore risen from about 80 to 86 percent.

But the knife cuts both ways: if investors trust the Fed to keep inflation in check, long-term interest rates could actually fall. And that counts the most for an interest-free asset like Bitcoin.

Prior to the numbers, Bitcoin just knocked back at the $84,000 resistance. In recent days, the price has often rebounded here and now it has also dived under the support.

The rising trend line around $82,000 is now the line in the sand for the bulls. If it does not offer salvation, a larger correction could follow.

In recent times, it has only become clear how many buyers are not ready just above $80,000. Only when that level is lost, there is reason to look further down.