Bitcoin and Altcoins Rebound as US Inflation Declines to 2.5%
Recent US inflation data has positively impacted the cryptocurrency market, particularly Bitcoin. In January, the Personal Consumption Expenditures (PCE) inflation rate fell to 2.5%, in line with expectations. Core PCE inflation was reported at 2.6%, marking its first decline since September 2024.
Market Reaction
- Bitcoin rose above $84,000, a 3.5% increase after the report and a 7.5% rebound from a low of $78,258.
- Altcoins also experienced gains: Ethereum climbed 5.8%, XRP increased by 9.2%, and Solana surged 16%.
- Solana's rise coincides with the upcoming launch of Solana futures by CME Group on March 17, pending regulatory review.
Crypto analysts noted the bullish implications of the PCE data. BACH highlighted the lowest core headline reading since August 2024, while Kevin pointed out a 53.7% probability of a Fed interest rate cut in June post-report.
Broader Economic Context
- Julien Bittel of Global Macro Investor stated that recent market volatility stems from tightening financial conditions in late 2023, which drained liquidity.
- Bittel observed easing financial conditions over the last two months, suggesting a potential recovery.
- Bitcoin's price reflects the impact of previous tightening, with an RSI indicating it is currently oversold.
At press time, Bitcoin traded at $83,804.
