How the rising trend in CPI will affect Bitcoin price in short to medium term?

[Sayeds56]

The consumer price index(CPI) data released today , fell short of market expectation and it is showing sign of increasing once again and it may lead to concerns about inflation and potential harsher interest rate increase in future. This is likely to create negative sentiment in all financial markets including Bitcoin.Hopefully, FED will take necessary action to curb this increasing trend.

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

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[EarnOnVictor]

Inflation bit last year, it's my hope that it doesn't repeat this year. Nonetheless, I had warned those that claimed that inflation is gone severally, it was a clear correction then and it has indicated its stance on bullish reversal. Who knows for how long this would last? The US CPI released yesterday as shown below is an indication, and it did not leave any of them out (Core, Normal and Yearly).



This has started affecting the FX market, gold included, but the crypto market is still stabilising. This might be another time for Bitcoin to prove itself as a dependable asset during inflation. But I doubt this if I must be sincere.

[albon]

The consumer price index(CPI) data released today , fell short of market expectation and it is showing sign of increasing once again and it may lead to concerns about inflation and potential harsher interest rate increase in future. This is likely to create negative sentiment in all financial markets including Bitcoin.Hopefully, FED will take necessary action to curb this increasing trend.

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

What I see is that the Consumer Price Index (CPI) data failed to put pressure on the cryptocurrency market. Bitcoin and Ethereum surged as the market calmed down after the US inflation data. And it will have a significant impact on Bitcoin in achieving great gains. Investors are generally looking for cryptocurrencies such as Bitcoin as a way to hedge against hyperinflation, which will result in increased demand for Bitcoin, which will increase the possibility of an increase in its price, but we must bear in mind that the crypto market is very volatile and that is why it will be very difficult to predict the exact direction. It is worth noting that it was not expected that the inflation rate in the states would drop to 6.4%, down from 6.5%, which is considered a decrease from last year, and this decrease in the core inflation rate may be due to other economic indicators improved, and then came firm statements about interest rates from US Federal Reserve officials to address inflation, as it is not the best news for the markets, but it will be in the interest of the dollar, so yes, I agree with you, Bitcoin will recover over time, and the market will continue to rise.

[Hamza2424]

CPI report always impacts the crypto market and the stock market directly, this time the results that we were expecting are not the same but still results are quite good. After the CPI report and Paxos press release market faced and temporary panic situation but at the same time CZ played a good move. Now the market is moving in good motion.

As you can see the market is now moving close to $23k and 21k is the strong support for Bitcoin now. The temporary impact of the report seems already ended. BUSD Fud is still here but things are clear now that Binance will continue to support BUSD. BUSD lost $700M in Market capital. I am not sure how Binance is going to maintain the Future minting of the BUSD.

[Husires]

It seems that the opposite is what happened, we witnessed strong rises in the price, which is an opposite sign of what you had expected.
Am I the only one who sees that these things are not interconnected, and when any correlation occurs, it is just a coincidence?
the price is still within the normal frequency range, which means that we can easily go back to the bottom of this area between 21k-24k.

[Sayeds56]

CPI report always impacts the crypto market and the stock market directly, this time the results that we were expecting are not the same but still results are quite good.
 BUSD Fud is still here but things are clear now that Binance will continue to support BUSD. BUSD lost $700M in Market capital. I am not sure how Binance is going to maintain the Future minting of the BUSD.

It is great to see that impact of negative CPI report was short lived and it didn't cause any panic selling in the market & the price of Bitcoin is now recovering.This morning, as Asian markets opened , Bitcoin reached a high of 2427,00 which is the highest price of last 6 months. many well known expect that Bitcoin will hit $30,000 before experiencing a bearish trend again.

Although Binnce is a leading crypto exchange with a large cash reserves, the recent FUD regarding BUSD did temporarily harm its reputation. However, it seems that Binance has resolved this issue and is now in better position.

[SquirrelJulietGarden]

The consumer price index(CPI) data released today
[...]
Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

Do you think it is too late to discuss about that?

Pandemic and consequent QEs from central banks especially the USA. central banks put the world in very inflationary time. CPI and interest rate are affected a lot in the past year 2022 and now in 2023, it is a considering time for FED to slow down their speed of increasing interest rate. CPI is an indicator that reflects economic and social status and if interest rate becomes better in future, we will see better CPI.

I believe that we will get better interest rate and CPI in 2023 that is positive support for financial markets as well as cryptocurrency market including Bitcoin.

FED did not increase interest rate instantly and sharply and I believe they will have similar style when reduce interest rate.

[Don Pedro Dinero]

It seems that the opposite is what happened, we witnessed strong rises in the price, which is an opposite sign of what you had expected.
Am I the only one who sees that these things are not interconnected, and when any correlation occurs, it is just a coincidence?
the price is still within the normal frequency range, which means that we can easily go back to the bottom of this area between 21k-24k.

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events. In theory it is a good hedge against inflation, if not the best, but apparently in the period of the highest inflation since its creation it has not been a good hedge against inflation because the price has fallen. I say apparently because if we look deeper we see that everything has gone down, which is normal due to the reduction policy of the central banks that have withdrawn money from circulation, and in general all markets have gone down.

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

[Sayeds56]

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

You bring up very interesting point regarding Bitcoin as a hedge against inflation. It is theatrically correct that due to its finite supply & decentralized nature, it should work as a good hedge against inflation. However, as you noted, short term fluctuation in Bitcoin price is not always correlated with inflation rate. It is also true that inflation measured by CPI doesn't necessarily reflect its impact on financial assets including Bitcoin. Inflation can lead to increase in price of assets as investors look for alternative stores of value to protect their purchasing power.

[jaberwock]

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events. In theory it is a good hedge against inflation, if not the best, but apparently in the period of the highest inflation since its creation it has not been a good hedge against inflation because the price has fallen. I say apparently because if we look deeper we see that everything has gone down, which is normal due to the reduction policy of the central banks that have withdrawn money from circulation, and in general all markets have gone down.

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

If you are into short or mid-term then why not? But for those who do long-term investing, then they can just neglect these because the flow of the price can still change later on. Bitcoin is definitely the best hedge against inflation because of it's deflationary characteristics. It's supply is very small and limited and then it halves every four years making the coin more scarce from time to time.

It's normal for Bitcoins value to go down because it was still a highly volatile coin but we shouldn't worry because its price can always recover no matter how low it dips. Other factors or mostly the happenings outside can also affect how it's value moves.

[Husires]

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events.

What is the definition of short and medium term? Because in Bitcoin, the definition of the medium term by two to 5 years is considered a long period of time compared to other investments, and the decentralization of Bitcoin will accelerate such tools. It is just a guess because there are many variables that will affect the price in a period of 5 years.

What I am trying to convey here is that these indicators cannot be relied upon in the short term and are not sufficient to bring about changes in the long term. Therefore, on their own, they are indicators of no value.

[Johnyz]

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

Bitcoin is recovering and seems unbothered by this issue. Most of the economy are rising as well though we cannot deny that bigger countries are experiencing a lot of problems economically and with their inflation. Bitcoin might be affected by this but I also believe that its only a temporary trend and the government will always find its way to recover. Long term player will just ignore this new because they believe the market will always rise and they think for the future of Bitcoin and not just with the short term trend.

[el kaka22]

Basically the value of dollar is going down, because costs are going up, and we all need to make more dollars to live the same life. That is simply called inflation, and it has gone up a lot so far and I am thinking that it may keep going up a bit more, not as fast as it used to but still could go up even more.

That means we need to find a solution to what we have and we should be going up a bit more, and that is going to be a tough situation to be in because while bitcoin prices going up thanks to inflation, the purchasing power may not, and that would mean you would have more dollars in the bank but same amount of things that you can buy with it all the same.

[dansus021]

To be honest, I hate looking at the economic calendar but like it or not that is their job as ex-forex traders CPI is always the moment of stress every decision they make "always" makes a market shake.

and that has come to bitcoin too after larger institution joined crypto industry is good that crypto gaining more people but news like "CPI" is the side effect 

[hugeblack]

I heard a lot of analyzes regarding producer and consumer prices, as producer prices slowed down more than expected, and therefore they may rebound in the next meeting by tightening the policy to 50 basis points or 75 basis points, and thus it will reach 5.2 percent for the next period, with interest rates stabilizing to 5 percent until the end of the end. We saw some negative returns, which are considered good unless changes occur that lead to an increase in prices during the coming period.

[beerlover]

To be honest, I hate looking at the economic calendar but like it or not that is their job as ex-forex traders CPI is always the moment of stress every decision they make "always" makes a market shake.

and that has come to bitcoin too after larger institution joined crypto industry is good that crypto gaining more people but news like "CPI" is the side effect 

I agree that these type of charts and the way wall street trades is so beyond me in the crypto world, I do not care about those at all. In crypto things work a little bit more differently and that's why it's not going to be the same thing. First of all, whole thing is connected to each other, secondly we are talking about just bitcoin going up and down could make the whole market go up or down.

This also means if there is one bad news about bitcoin, the whole market will crash and that's not something you can avoid here. When you compare that to stocks where if one stock has bad news, then rest are fine? I would say it's not going to be the same thing to trade the same way.

[Mauser]

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

The bitcoin price looks already pretty strong compared to the levels at the start of the year around 16-17,000 USD. In terms of inflation not much changed over the last 6 months, the central banks kept increasing the interest rates but prices are keep rising. Overall I think that a higher inflation is also going to lead to a higher bitcoin price. In the short term however investors are spooked and will be selling all types of risky assets including crypto currencies. Higher interest rates by the central banks will make all fixed income products more attractive, so that is what most investors are going to switch into. The problem is that even the high yield bonds are not going to yield returns as high as the inflation rate. So for investors to not lose value long term they have to come back to the crypto market.

[electronicash]

so many hypotheses about how BTC price is affected by macro news relating to CPI and raising interest rates but it's often seen that it's all related to crypto factors like the adoption. but its definitely been observed the price was greatly affected when the interest rate is raised either high or low and so the reason we are very anxious about the next FED statement, particularly inflation, and unemployment stats. these two are the basis of money creation.

its economy is based on debt so the more money is created, the BTC price will also be positively affected.

[Edwardard]

This was the first time where CPI (Consumer price index) data came in higher than ppl's expectations and the bitcoin market still went up, despite the us30 going downwards. Personally, Im very excited to see the price action in the upcoming months. I believe slowly we can stop reacting to these CPI data very soon either bullish or bearish. The crypto market is learning to adapt to the change and survive just like it did in the past years.

[yhiaali3]

I see that the majority are optimistic about the short-lived negative impact of CPI on the crypto market, especially Bitcoin. This reflects people's increasing confidence in Bitcoin as the most important asset for a hedge against inflation.

As inflation continues and people tend to buy bitcoin to preserve the value of their money, the effect of CPI will fade in the near future, and we can see the exact opposite with the increase in the positive effect of people tending to buy more bitcoin.