Hot Inflation & What to Watch Next - 14/02/2514th of February 2025
•XRP and BNB leading, as Bitcoin trades flat in the last seven days.
•Headline inflation metrics in the US land above expectations.
•Impactful data point to watch heading into the end of February.
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A big week of headlines and events, particularly out of the US, have netted very little change in Bitcoin’s price.
Bitcoin is down 0.1% at the time of writing in the last seven-days, while altcoins such as XRP and BNB are showing double-digit gains.
Bitcoin has struggled to make new year-to-date highs in the current state of global conditions. In contrast, global indices in the UK (FTSE100) and China (CSI300) have continued to make new year-to-date highs
Mixed Messages & Above Expected Results
Fed Chair Jerome Powell mentioned earlier this week at a senate banking enquiry that the current state of monetary policy does not require easing conditions, as the economy remains strong and the 2% target for inflation is key.
However, he has referenced that unexpected moves in the labour market or a significant cooling of inflation could change the committee’s mind.
“If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”
On this point, headline metrics for inflation land above expectations this week.
On Tuesday, Consumer Price Index (CPI) landed above expectations at 3.0%, rising 0.1% from the previous month.
Overnight the Producers Price Index (PPI) landed above expectations at 3.5% year-on-year. This figure remains unchanged from the previous month and represents the inflation burden on producers in the US.
Key data to come
On the last day of February the US Personal Consumption Expenditures (PCE) data will provide further clarity towards the state of monetary policy heading into next month.
PCE is the leading indicator used by the policy committee to measure inflation.
Fear and greed currently reads 40 – neutral.
Bitcoin Analysis
The price of Bitcoin is currently trading within the January high and low range, and on the Bollinger band we are entering a period where the upper and bottom channel is compressing.
Bullish Scenario
In the coming days, price may see a sharp move higher as the Bollinger Bands tighten. If bulls regain control and reclaim the monthly open, they could push toward last month’s high.
Bearish Scenario
We could also with this compression in the Bollinger Bands, see volatility moving price to the downside. This may result in prices heading towards the January low.
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