TL;DR

According to Markus Thielen from 10x Research, if the US Consumer Price Index (CPI) falls below market expectations, Bitcoin could experience a significant surge.
The decline in inflation observed in the Truflation Index suggests that prices may be dropping faster than anticipated. 
A $10,000 rally in Bitcoin could bring it closer to its record price of $109,000 if the CPI report shows a lower-than-expected result.

The outlook for Bitcoin could change dramatically if the upcoming US Consumer Price Index (CPI) report shows a figure lower than expected, according to 10x Research. Analyst Markus Thielen pointed out that there is a “real possibility” of inflation being lower than projected in the report set to be released on February 12. This decrease in inflation could spark a new rally in Bitcoin’s price, as investors would interpret it as a sign that inflationary pressures are easing faster than anticipated. Such a shift would likely result in a stronger market sentiment for cryptocurrencies, further boosting investor confidence and helping to solidify Bitcoin’s position as a store of value.

The Impact of Lower Inflation: Could Bitcoin Rise?

Although most analysts expect the inflation rate to remain at 2.9% year-on-year, Thielen explains that the Truflation Index, which tracks real-time inflation, has shown a significant decline from 3.0% to 2.1%. This suggests that inflation may be easing faster than the market had anticipated. If the CPI for February surprises with a result lower than expected, such as 2.7% or 2.8%, it could provide relief to financial markets, likely boosting Bitcoin to new highs and increasing overall market optimism.

This phenomenon was already observed in January when Bitcoin saw a $10,000 increase after the CPI surprise. In that case, investors were expecting a third consecutive month of rising inflation, but the report revealed that inflation had not increased, providing relief and sparking a rally that pushed Bitcoin back above $100,000. However, the momentum was temporarily halted by tariffs imposed by Donald Trump on Canada, Mexico, and China, which disrupted market expectations.

If the February CPI surprises with a lower-than-expected figure, the scenario could repeat itself, driving Bitcoin toward an additional $10,000 rally. This would bring the asset closer to $105,491, just 3.5% below its all-time high of $109,000, briefly reached in January. Meanwhile, other analysts, such as Michaël van de Poppe, foresee that Bitcoin could reach new all-time highs within weeks, especially if gold continues to show strong performances as a safe-haven asset.

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Filed under: News - @ February 12, 2025 2:25 pm