SKN | Bitcoin Climbs Above $69K on Softer US CPI, but Fed Rate-Cut Odds Remain Subdued

Key Points:

• Bitcoin rose as much as 4% to reclaim the $69,000 level after January CPI came in below expectations.
• Core CPI cooled to 2.5% and headline inflation to 2.4%, marking multiyear lows.
• Despite the inflation surprise, markets still price less than a 10% chance of a March Federal Reserve rate cut.

Bitcoin pushed higher at Friday’s Wall Street open after a softer-than-expected U.S. inflation report lifted risk appetite, though expectations for imminent Federal Reserve rate cuts remained restrained. The largest cryptocurrency climbed roughly 4% on the day, reaching $69,190 on Bitstamp before easing slightly. The move brought BTC back toward a key technical zone that has repeatedly capped upside attempts in recent weeks.

Inflation Cools, But Policy Path Unchanged

According to the Bureau of Labor Statistics, January’s Consumer Price Index showed core inflation at 2.5% year-over-year, matching expectations, while headline CPI came in at 2.4%, 0.1 percentage points below forecasts. Market commentary from The Kobeissi Letter noted that core CPI is now at its lowest level since March 2021, reinforcing the broader disinflation narrative.

However, the cooling print did little to materially shift rate expectations. Data from the CME Group FedWatch Tool showed that traders still assign less than a 10% probability to a 25-basis-point rate cut at the Federal Reserve’s March meeting. The muted shift in rate-cut odds reflects continued resilience in labor market data and policymakers’ caution about declaring victory over inflation too early.

Bitcoin Outperforms Traditional Assets

While macro assets reacted cautiously, crypto stood out. U.S. equities traded modestly lower on the day, and the U.S. Dollar Index attempted to recover after briefly dipping toward 96.8 following the CPI release. Gold edged higher as it sought to retest the $5,000 per ounce level.

Bitcoin’s relative strength suggests that digital assets may be benefiting not only from macro data but also from positioning dynamics after weeks of bearish sentiment and capital outflows.

Andre Dragosch, European head of research at Bitwise, argued that alternative inflation metrics such as Truflation had already signaled cooling price pressures, making the CPI result less surprising from a crypto market perspective.

Technical Resistance Remains in Focus

Despite the bounce, traders remain cautious. The $68,000–$69,000 zone is widely viewed as critical resistance. The range encompasses Bitcoin’s 2021 cycle high and its 200-week exponential moving average, both of which carry significant psychological and technical weight.

Trader Daan Crypto Trades described Bitcoin as consolidating within a falling wedge pattern, noting that prior breakout attempts near $68,000 were rejected. Sustained momentum above this band would be needed to shift short-term market structure. Similarly, analyst Michaël van de Poppe suggested the current area could still produce a higher low, though he characterized conditions as fragile.

Strategic Outlook

Bitcoin’s rebound on softer inflation data demonstrates the asset’s sensitivity to macro signals, yet the restrained reaction in rate-cut probabilities underscores that monetary policy remains tight relative to prior easing cycles. If inflation continues to trend lower and policy expectations gradually shift, Bitcoin could find additional tailwinds. However, without a decisive change in Federal Reserve guidance or a breakout above entrenched resistance, rallies may remain tactical rather than structural.

For now, Bitcoin has reclaimed $69,000, but the broader trend will depend less on single data prints and more on sustained macro easing and renewed liquidity across risk markets.