Bitcoin Bounces Back as Inflation Cools: What’s Next? #CriptoNews

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• Bitcoin gained following February’s CPI inflation rate of 2.8%, which came in lower than expected
• The softer inflation data renewed hopes for Federal Reserve interest rate cuts
• BTC climbed from approximately $81,000 to $84,500 after the CPI report release
• Earlier in March, Bitcoin experienced a sharp decline from $94,700 to $76,800
• Analysts remain optimistic about Bitcoin’s recovery despite recent market volatility

Bitcoin prices saw a modest recovery yesterday following the release of February’s Consumer Price Index (CPI) data, which came in lower than market expectations. The leading cryptocurrency climbed from around $81,000 to $84,500 after the inflation report sparked renewed optimism about potential interest rate cuts by the Federal Reserve.

The US Bureau of Labor Statistics reported that the CPI increased by 0.2% in February on a seasonally adjusted basis. This brought the annual inflation rate down to 2.8%, below economists’ projections of 2.9%.

The monthly figure also marked a significant drop from January’s 0.5% increase. Core CPI, which excludes food and energy prices, rose 0.2% month-over-month, below the forecast of 0.3%.

On an annual basis, core CPI registered at 3.1%, slightly under the 3.2% consensus estimate. These cooler inflation readings have bolstered investor sentiment in risk assets like Bitcoin.

The market reaction stands in contrast to last month’s performance. Bitcoin declined after January’s CPI data came in hotter than expected.

Since then, Bitcoin has faced additional headwinds. US economic policies, including trade tariffs on countries like Canada, Mexico, and China, have limited bullish momentum for digital assets.

Earlier this month, Bitcoin experienced one of its sharpest declines in recent memory. The price dropped from around $94,700 on March 2 to as low as $76,800 on March 11.

According to Trader Edge on X, recently we have seen bullish divergence on the daily chart, this can be the first signs of a possible reversal.

This steep correction represented a loss of nearly 19% in just nine days. The broader cryptocurrency market felt similar pressure during this period.

The total crypto market cap shrank by approximately $600 billion over the same timeframe. It fell from $3.2 trillion to around $2.6 trillion at the time of the CPI data release.

Lower inflation sparks hope

Lower inflation numbers have sparked hopes that the Federal Reserve may pivot to a more accommodative monetary policy. Investors are now anticipating potential interest rate cuts to boost market liquidity.

Such monetary easing typically favors risk-on assets like stocks and cryptocurrencies. Lower interest rates make yield-bearing investments less attractive while increasing appetite for growth-oriented assets.

Following the inflation data release, other cryptocurrencies also saw gains. Dogecoin (DOGE) posted a 2.9% rise in the 24 hours after the CPI report.

Industry experts remain optimistic

Despite the recent market turbulence, industry experts remain optimistic about Bitcoin’s longer-term prospects. Crypto entrepreneur Arthur Hayes recently suggested that while BTC may face further short-term declines, central banks will likely resort to quantitative easing to stabilize markets.

This monetary intervention could help risk assets recover their losses. A weakening US dollar might also accelerate Bitcoin’s price recovery in the coming months.

Analysis from CryptoQuant contributor Ibrahim Cosar suggests that despite the current downturn, Bitcoin could reach $180,000 by 2026. This projection comes amid expectations of continued institutional adoption and macroeconomic shifts.

At press time, Bitcoin was trading at $81,541, reflecting a 0.6% gain over the previous 24 hours. Market participants are now watching for further economic indicators and Federal Reserve communications for clues about future monetary policy decisions.