#Bitcoin (BTC) extended its losses despite favorable Consumer Price Index (CPI) numbers, as the flagship cryptocurrency fell below $108,000. BTC is down nearly 1%, trading around $107,697. BTC started the week on a bullish note, surging past $110,000 on Monday. However, it lost momentum in subsequent sessions, slipping below $110,000 on Wednesday to settle at $108,687. While BTC is trading in the red, analysts believe the asset is entering a period of volatility before a short-term rally to $111,000, thanks to several macroeconomic factors.
These factors include a potential breakthrough in US-China trade talks, and softer-than-expected inflation numbers, which could support a rally. Jag Kooner, Head of Derivatives at Bitfinex, believes a possible agreement between the global economies could reduce market uncertainty and boost investor sentiment. However, he pointed out that the market could have already priced in a potential breakthrough, indicating a limited price impact.
Kooner believes the most likely short-term effect will be increased volatility. The same applies to CPI numbers. According to Kooner, these developments suggest BTC could be preparing for a significant rally.
“Core CPI up 0.1% m/m firms up rate cut bets, compresses real yields, and creates a vacuum above $111K for bitcoin. That move would likely be spot-driven, with ETF demand accelerating as the macro regime shifts toward easing.”
Bitfinex analysts believe BTC could reach $111,000 despite heightened volatility and a substantial decline to below $108,000 this week. According to Kooner, soft inflation numbers could increase the likelihood of a rate cut, giving assets like BTC a boost. The Bitfinex analyst believes this could drive the price to $111,000 even though its upside depends on the performance of the S&P 500.
