The price of Bitcoin (BTC) could fall after aggressive statements from Federal Reserve Chairman Jerome Powell and an unexpected jump in inflation in the United States.
These events led to significant outflows from digital asset investment products. James Butterfill of CoinShares calculated that this was the first major outflow after a 19-week streak of inflows totaling $29,4 billion. Bitcoin , which is sensitive to interest rate changes, was hit the hardest, recording $430 million in losses.
During a recent congressional hearing, Powell suggested that rate cuts could take longer than previously expected, adding that they could remain high for an extended period.
In addition, the latest inflation data in the US was disappointing: the consumer price index (CPI) for January showed growth of 3%, exceeding the December level of 2,9%, while in January prices increased by 0,5% instead of December's 0,4%.
Rising inflation will lead to a tightening of Fed policy, andthat will force the market to enter a bearish trend. As a result, many investment products based on digital assets will show an outflow of funds, respectively, pressure on Bitcoin and other cryptocurrencies will increase.
Now Bitcoin is in a consolidation phase, making one wonder whether the correction has bottomed out or whether the price will resume its growth. Some analysts believe that a larger corrective wave may form, which will temporarily push the BTC price back to the $82,000 level.
