According to the Bureau of Labor Statistics (BLS) report, Core CPI rose just 0.2% month-over-month. The forecast was higher - 0.3%.
Investors took this report as a signal of possible easing of monetary policy. Lower rates increase liquidity, reduce the attractiveness of bonds and channel capital into equities and digital assets.
Market Reaction: Bitcoin Under Pressure
Despite the positive data, BTC is not showing strong growth so far. It has lost 15% in the last four weeks, remaining in the range of $80,625 - $84,302.
Andre Dragosch, Bitwise's head of research in Europe, believes the slowdown in inflation is a good sign for BTC, but the effect won't be immediate.
"The Fed has been given more room to cut rates, which will support bitcoin in the long run. However, the market remains cautious for now," he noted. "The falling CPI gives the Fed more freedom to cut rates, which probably explains why bitcoin started to grow against this background," the expert added.
However, BIT Mining chief economist Yuwei Yang warns: the market is still under pressure.
"One good inflation figure will not eliminate weeks of fear and uncertainty. Investors are still cautious," the expert emphasized.
Trump's Policies May Complicate The Situation
An additional factor of uncertainty is Donald Trump's aggressive trade policy. Tariffs on imports may increase the cost of goods, which will slow down the decline in inflation and make it more difficult for the Fed to ease policy.
"High inflation due to tariffs makes it hard to cut rates, but the risk of recession and market collapse is weighing on the Fed. It's a double trap," Yang believes.
ETF Investors Return: Institutional Investors Keep An Eye On FED
On the back of slowing inflation, Bitcoin-ETFs recorded an inflow of $13.3 million, breaking a five-day streak of outflows. The ARK Invest ETF in particular stood out, indicating institutional interest.
Bitfinex predicts that if the Fed hints at easing, flows into cryptocurrency ETFs could intensify.
"The market is watching the Fed's policy. If rate expectations become more 'soft', BTC support in the $72,000-$75,000 range could hold," Bitfinex analysts said.
What's Next?
The market focus shifts to the Fed meeting on March 19.
- Will the regulator confirm plans to cut rates?
- Will the rise of Bitcoin ETFs impact the market?
- Will Trump's tariffs increase pressure on inflation?
The market is not giving unambiguous signals yet. But if the Fed confirms its readiness for easing, BTC and other risky assets may get a new wave of growth.
