BTC surges 1.61% amid inflation fears and Trump tariff policies as investors demand risk assets.
The price of Bitcoin (BTC) experienced a 1.61% rebound, reaching $97,321, despite inflation data for January 2025 beating expectations. As Treasury bonds lose appeal due to rising yields, investors are turning to risk assets as a hedge against a possible inflationary outbreak.
The leading cryptocurrency was rejected by the 50-period moving average, sending a bearish signal in the short term / Tradingview
Inflation and its impact on markets
Inflation data for January 2025 showed core inflation at 3.3%, slightly above the 3.1% forecast, while headline inflation (CPI) stood at 3%, close to the central banks' 2% target. Although these figures suggest a slowdown compared to 2024, inflationary pressures persist, especially in sectors such as services and housing.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, warned that if inflation continues to show high data in the coming months, the Fed could be forced to keep interest rates high, which would strengthen the dollar and put pressure on risk assets, including cryptocurrencies.
Bitcoin as an inflationary refuge
Despite inflation fears, Bitcoin once again demonstrated its potential as a safe haven asset. BTC remained above the EMA100 ($93,500), a key dynamic support, although it faced resistance at the EMA50 ($98,200). This behavior suggests a bearish sentiment in the short term, but a bullish one in the medium and long term.
Trading volume, however, remained below the 25-day average, indicating that the rally could be a technical bounce after 11 days of decline driven by fears of President Donald Trump's tariff policies.
Investors' Dilemma: Bonds vs. Cryptocurrencies
The rise in Treasury bond yields reduced their appeal for investors seeking stable income. This led many to consider riskier but higher-yielding alternatives, such as dividend stocks and, of course, cryptocurrencies.
However, persistent inflation could limit the Fed's ability to cut rates, which would benefit the dollar and put pressure on assets like Bitcoin.
What to expect in the future?
The current scenario is one of caution for investors. While the dollar could strengthen in the short term due to elevated interest rates, Bitcoin and other cryptocurrencies could benefit if inflation continues to slow and the Fed signals monetary easing.
For now, Bitcoin remains an attractive option for those looking to hedge against economic uncertainty, but investors should keep an eye on moves by the Fed and global economic policies.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and carry risk. Please do your own research before investing.
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