Bitcoin Jumps 4% on CPI Data but Faces Key Resistance at $83.8K—What’s Next?
Bitcoin (BTC), the world’s largest cryptocurrency, surged past $84,000 early Thursday, marking a strong recovery after recent dips.
However, the uptick was short lived as price fell below $84,000. This rally came as broader financial markets reacted to economic data and geopolitical developments.
#BITCOIN WAY TO 🌙
$84,000 https://t.co/5QeCQbHV60 pic.twitter.com/yLknt9z0m9
— 𝐔𝐌𝐄𝐑 ( THE BULL ) 🔥🔥 (@UmerTheBull) March 12, 2025
The overall crypto market also turned green, with popular altcoins like Ethereum (ETH), Solana (SOL), Ripple (XRP), and Litecoin (LTC) gaining ground. However, the Market Fear & Greed Index remained at 21, signaling extreme fear among investors.
Bitcoin’s Surge Fueled by Inflation Data and Fed Speculation
Bitcoin’s price rally was largely influenced by macroeconomic data, particularly the U.S. Consumer Price Index (CPI) for February. The report revealed a lower-than-expected inflation rate, with a monthly increase of 0.2% and an annual inflation rate of 2.8%. This fueled optimism about potential Federal Reserve rate cuts, which, in turn, boosted demand for risk assets like Bitcoin. Following the CPI report, Bitcoin saw a 4% rally, mirroring gains in the stock market as the S&P 500 rose 0.49% and the Nasdaq climbed 1.22%.
· Bitcoin jumped 4% after lower-than-expected U.S. CPI data.
· Fed rate cut hopes boosted demand for risk assets.
· Stocks also gained, with S&P 500 up 0.49% and Nasdaq up 1.22%.
Bitcoin Demand Weakens Amid U.S. Inflation Uncertainty and Trump’s Tariffs
Despite the recent price rally, Bitcoin demand in the U.S. has shown signs of weakening. Data from CryptoQuant indicates that BTC demand dropped by 103,000 BTC last week, marking its fastest decline since July 2024. This downward trend has been attributed to uncertainty surrounding U.S. inflation and President Donald Trump’s imposed tariffs on February 1, which have impacted investor sentiment.
Moreover, Federal Reserve Chair Jerome Powell recently reiterated that the central bank is in no rush to adjust interest rates, which has made investors more cautious. As a result, Bitcoin’s price action remains highly sensitive to macroeconomic developments, with traders closely monitoring upcoming data releases and Fed policy signals.
· Bitcoin demand in the U.S. fell by 103,000 BTC, the biggest drop since July 2024.
· Uncertainty over U.S. inflation and Trump’s tariffs weakened investor sentiment.
· Fed’s cautious stance on interest rates keeps Bitcoin sensitive to economic data.
Bitcoin Needs $89K Breakout to Confirm Bullish Momentum
Despite Bitcoin’s recent gains, analysts highlight that it must close above $89,000 to confirm a sustained bullish trend. According to crypto analyst Matthew Hyland, a weekly close above this level would indicate that Bitcoin’s bottom is in, potentially paving the way for further upside. However, if BTC fails to hold above this threshold, it may drop towards the $74,000-$69,000 range, revisiting price levels not seen since November.
Bitcoin must secure weekly close above $89K to confirm bottom has passed pic.twitter.com/YpRxP2gOdB
— The Global Current (@360_Globalnews) March 13, 2025
Market volatility remains high, with Bitcoin trading between $80,000 and $84,000 amid escalating global trade tensions. While softer inflation data initially drove a rally, the European Union’s recent counter-tariff announcement triggered some profit-taking, pulling BTC lower as concerns of a prolonged trade war resurfaced.
Bitcoin Price Analysis
Bitcoin (BTC/USD) is struggling to break above key resistance at $83,800, with the 50-period EMA at $82,971 acting as a dynamic barrier. The price remains below a descending trendline, indicating bearish pressure. If BTC fails to reclaim $83,800, further downside toward $78,529 and $75,195 is possible.
A breakout above resistance could push BTC toward $86,973, but strong volume confirmation is needed.
The broader trend remains weak amid continued ETF outflows and macroeconomic uncertainties. Traders should monitor the daily close, as a sustained move above $84,000 would signal bullish momentum, while rejection could trigger a deeper correction.
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