US CPI Data for January Shows Cooling Inflation: How Will Bitcoin Price React?

US CPI Data for January Shows Cooling Inflation: How Will Bitcoin Price React?

The cryptocurrency has suffered heavily in recent weeks, will it finally recover?

The long-awaited consumer price index for the first month of 2025 has just been released, showing that inflation has cooled year on year to 2.4%, which is slightly lower than the estimated 2.5%.

The Core CPI, which excludes more volatile sectors such as food and energy, was in line with expectations at 2.5%. Nevertheless, analysts indicated that the monthly increase in the regular CPI is the lowest since last May, at just 0.2%.

Heather Long, chief economist at Navy Federal Credit Union, noted that prices for gasoline, used cars and medical care all fell in January, helping to reduce inflation even as utilities and transportation rose.

She noted that this is good news on the inflation front, even though there may still be “an increase in rates.”

Bitcoin’s price tends to be volatile when US CPI data is released. The first few minutes were quite positive as the price rose slightly to $67,600 before correcting to $67,200 at the time of writing.

A bigger impact is expected once the US Federal Reserve considers this data for its next move in terms of rate cuts.

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