Recently the World’s largest cryptocurrency by market capitalization fell below the $23,000 margin once again.
The asset looked to have picked up steam after Jerome Powell announced a new interest raise of 0.25% last week.
Following the interest raise report, BTC reacted favorably, reaching the $24,000 on February 2 – the first time the asset hit that mark in over 6 months.
A day after, the asset retracted by a small margin, but continued to trade above the $23,000 resistance zone. However, during the weekend, continued to retract, eventually crossing down that margin.
On Sunday, $BTC fell from $23,140 and eventually hit $22,788 this Monday morning. Since the FOMC meeting, the asset lost 5.6% of its value.
The crypto market is now on standstill after gaining traction following the interest rate hike announcement last week. Jerome Powell, the chairman of the Federal Reserve, is slated to speak with David Rubenstein on Tuesday at the Economic Club of Washington, D.C.
Awaiting the CPI Report
In all likelihood, the crypto market is beginning to retract in anticipation to the next major event that can affect the price of digital assets.
On February 14, the American Government will announce the results of last month’s Consumer Price Index (CPI).
The Consumer Price Index (CPI) is a measure of inflation produced by the Bureau of Labor Statistics (BLS) in the United States. It tracks changes in the prices of a basket of goods and services consumed by a typical urban household over time.
If the report indicates that inflation is not decelerating as fast as expected, that would indicate that the Federal Reserve’s interest raises are not proving effective against inflation – and the Nation could be on the verge of a full on recession.
If that happens, risky assets like crypto would lose purchasing power against the U.S. Dollar. However, if inflation continues to go down as expected, bitcoin and other assets will most likely go back to January’s bullish market.