Bitcoin (BTC) experienced notable volatility on March 12, facing a classic Wall Street sell-off as market bears emerged amidst a welcome dip in US inflation rates. The latest Consumer Price Index (CPI) report revealed a drop to 2.8%, indicating easing inflationary pressures, yet this brief respite did not prevent significant selling activity across crypto markets.
Data from trading platforms indicated that BTC/USD soared to a three-day high of $84,437 on Bitstamp before abruptly reversing course. According to insights from trading analysis, market participants noted a simultaneous decline in the Core CPI, which fell to 3.1%—slightly below anticipated figures.
Despite these developments, the relief that low CPI figures brought was short-lived, as Wall Street’s prior trading session anticipated a return of typical selling pressures in the crypto landscape. By the time of reporting, Bitcoin’s price had retreated to around $82,400, consolidating near the daily open as traders processing the latest economic signals wrestled with uncertainty.
Market experts, such as Rekt Capital, expressed cautious optimism, highlighting that Bitcoin’s recent daily close could signify a movement away from the CME Gap after this level transformed into a support zone. This points to the potential for a post-breakout retest that might provide key insights into future price trajectories.
Additionally, analysis from fellow traders emphasized the critical nature of established support levels at approximately $83,550 and $85,650, based on the 200-day simple and exponential moving averages. Observations indicated that continued upward momentum is vital for bulls aiming to reclaim these pivotal thresholds.
Recent trends in Bitcoin exchange-traded funds (ETFs) have also spurred caution among institutional investors, with notable outflows of $153.87 million reported. This prominent shift signals potential hesitancy in the face of prevailing inflation concerns. The market outlook remains complex as traders and analysts assess the implications of the latest CPI figures on Federal Reserve monetary policy decisions.
With heightened volatility anticipated in the upcoming trading sessions, all eyes will be on whether the disinflationary trend can sustain itself or if market conditions will lead to further fluctuations. As institutions adjust their positions amid these developments, retail investors should proceed with caution and consider the risks inherent in crypto investments.
