According to Cointelegraph: Bitcoin's price fell nearly 4%, a decrease of $1.6K, in response to the recent US inflation data which negatively influenced risk assets. As enhanced January Consumer Price Index (CPI) figures were released, Bitcoin saw immediate losses at the start of Wall Street's trading on Feb. 13.
Month-on-month CPI was reported at 0.3%, and the year-on-year figure hit 3.1% — 0.1% and 0.3% higher than anticipated. This inflation data has led the markets to reconsider the possibility of the Federal Reserve cutting interest rates, with expectations shifting from March to later in the year.
Data from CME Group’s FedWatch Tool showed the chance of a rate cut in March at just 8.5%, compared with 17.5% on Feb. 12. The Kobeissi Letter, a trading resource, commented on this saying, "This inflation reading was much hotter than expected... A March rate cut is likely gone."
The rise in CPI overshadowed positive trends in inflows to spot Bitcoin exchange-traded funds (ETFs). Despite these inflows, Bitcoin still struggled to reach $49,000. As per data from crypto intelligence firm Arkham, Grayscale Bitcoin Trust (GBTC) saw outflows amounting to around 2,400 BTC ($117 million) on the same day.
However, Daan Crypto Trades, a popular trader, recognized the continuing positive trend for ETF flows, which are absorbing the BTC supply about twelve times faster than new coins are being introduced to the market. He noted on Twitter, "Yesterday's ETF net flows saw another massive +$493M increase. This makes for $1.4B in net inflows during the past 3 trading days. We now have 12 consecutive positive days of net inflows.”
