Bitcoin Price on Edge Ahead of US CPI Report: Will It Hit $100K?

Bitcoin faces a crucial moment as the US CPI report approaches, potentially influencing the Federal Reserve’s interest rate strategy. Could this data push BTC toward the highly anticipated $100K milestone?

Bitcoin Drops 3.72% as Fed Remains Cautious on Rate Cuts

Bitcoin fell 3.72% on Tuesday, sliding from $98.4K to $94.8K. The decline followed comments from Fed Chairman Jerome Powell, which some interpreted as a sign of easing. Despite this, the Fed has remained firm in its stance on rate cuts, as reaffirmed on February 11. However, the upcoming CPI report could pressure policymakers to reconsider their position.

Powell stated:
“The policy stance is now much looser than before, and the economy remains strong, so there is no need to rush to adjust the policy stance. Inflation has eased significantly, but remains high.”

Why Is Bitcoin Down 2.05% Ahead of the CPI Release?

Bitcoin saw another dip on Tuesday following Powell’s remarks on quantitative easing, reaching $97,150 by 8 PM after hitting a daily high of $97,577. BTC down 2.05% as of press time. Powell also noted:

“We would use quantitative easing only when rates are at zero.”

With the US CPI report set for release, the data will be a key factor in Bitcoin’s short-term movement. According to TradingEconomics, the consensus for Core CPI MoM stands at 0.3%, up from the previous 0.2%, while headline inflation is expected to remain unchanged at 2.9%.

How Will Bitcoin React to CPI Data?

Bitcoin’s response will depend on three potential outcomes:

• CPI Meets Expectations: If the data aligns with forecasts, the Fed is likely to maintain its current rate strategy. This could ease stagflation concerns and create a mildly bullish sentiment.
• CPI Exceeds Expectations: A higher-than-expected reading could delay rate cuts, leading to a stronger US dollar and downward pressure on Bitcoin.
• CPI Falls Below Expectations: A lower reading may fuel expectations of earlier rate cuts, potentially sparking a rally for Bitcoin and other risk assets.

With a Core CPI MoM consensus of 0.3%, short-term volatility is expected. A higher print could reignite fears of policy tightening, while a lower figure may strengthen bets on Fed easing. Additionally, weak job data—such as the recent 143K payrolls—adds complexity to the outlook. If CPI surprises to the downside, it may offset growth concerns, while a higher figure could amplify stagflation worries, negatively affecting Bitcoin and Ethereum. In this scenario, $100K remains a key target.

Key Bitcoin Levels to Watch Amid Inflation Report

Bitcoin recently swept Monday’s low of $95.2K and is attempting a recovery. However, CPI-driven volatility could push BTC toward $94.6K before a potential rebound. Short-term traders may look at this level for buying opportunities, with key upside targets at:

• $96.8K – Point of Control (POC)
• $100K – Previous month’s VWAP
• $101.5K – Key resistance level

A breakout above $101.5K and its conversion into support could open the door for a prolonged rally, setting the stage for new all-time highs.

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