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Decoding the mixed reactions towards BTC as CPI rose by 0.5%

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Decoding the mixed reactions towards BTC as CPI rose by 0.5%

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  • CPI increased by 0.5% as the annual rate of inflation hit 6.4%.
  • BTC witnessed a brief downtrend after the CPI report but recovered briefly after.

The US Bureau of Labor Statistics issued its Consumer Price Index (CPI) report on 14 February, ending days of anticipation and rumors. So, what was Bitcoin’s [BTC] trajectory after the report was published?


Read Bitcoin’s [BTC] Price Prediction 2023-24


CPI within range as inflation rate surprises

According to the estimates of economic experts, the CPI increased by 0.5% in January, up from 0.1% in December. The annual inflation rate, however, was much higher than expected, coming in at 6.4% (up from 6.5% in December) despite forecasts of only 6.2%. 

In addition, the core CPI, which excludes food and energy costs, rose 5.6% from a year ago. This was quicker than the 5.5% predicted and down from 5.7% in the previous month. According to the numbers, the Federal Reserve will probably maintain its hawkish stance. Further interest rate hikes could also be on the table at future Federal Open Market Committee (FOMC) meetings.

Trader’s sentiments pre-CPI

As measured by the Options 25 Delta Skew, options traders appeared to have bearish feelings toward Bitcoin before the release of the CPI report. The observed statistic indicated that, before the CPI announcement, puts were more popular than calls. Furthermore, puts were deemed more expensive than calls, signaling a bearish sentiment before the CPI announcement. 

Bitcoin Options 25 Delta

Source: Glassnode

A measure of the disparity between the implied volatility of options contracts that are 25 delta out of the money (OTM) and at-the-money (ATM) is known as the “options 25 delta skew.” When the skew is positive, investors are more worried about potential losses, while when it’s negative, they’re more concerned about potential gains.

BTC’s volatility drops as price recovers

Bitcoin’s volatility has been decreasing, as indicated by Coinglass’ Volatility Index. At the time of this writing, observed volatility was just over 2%, and it appears to be declining as nerves calm in the wake of the CPI news.

Bitcoin volatility chart

Source: Coinglass


How much are 1,10,100 BTCs worth today?


The market’s reaction to the CPI report was quite volatile after its release. The news first sent Bitcoin prices tumbling on the six-hour timescale chart. Nonetheless, on 14 February, it jumped by $700 to a trading high of $22,300 before retracing to a close of approximately $22,400. It dropped to about $22,100 in trading as of this writing, a loss of about 0.47%.

Bitcoin (BTC) price move

Source: Trading View

Also, the asset’s Relative Strength Index indicated that the price rise had initiated a bull trend. Because of this price increase, the RSI line was above the 50 level at press time. It did, however, appear to be in danger of slipping below the line again if the observed price decrease persisted.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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