Bitcoin Drops as Investors Weigh Inflation Data and Fed Policy Outlook

Bitcoin fell on Monday as traders assessed U.S. inflation data and prepared for Federal Reserve officials’ upcoming remarks on monetary policy.

Bitcoin Price Update (as of 01:30 ET / 06:30 GMT):

• Bitcoin (BTC): -1.3% to $96,368.1

Key Market Drivers

1. Lingering Inflation Concerns
   • U.S. Consumer Price Index (CPI) data for January showed inflation remaining above the Fed’s 2% target.
   • This has reinforced expectations of prolonged higher interest rates, which typically hurt risk-sensitive assets like Bitcoin.
2. Federal Reserve Caution
   • Investors are closely watching Fed officials’ statements later today for clues on future rate decisions.
   • If policymakers signal a “higher-for-longer” stance, Bitcoin could face additional downward pressure.
3. Crypto ETF Outflows
   • Institutional and retail investors have been reducing crypto exposure, leading to outflows from crypto ETFs.
   • Analysts cite profit-taking, regulatory uncertainties, and a broader risk-off sentiment as key reasons.

Altcoin Market Performance

Most altcoins mirrored Bitcoin’s decline, except for Cardano (ADA), which gained 3.1%.

• Ethereum (ETH): -1.1% to $2,680.19
• XRP: -4.1% to $2.6724
• Solana (SOL): -6.2%
• Polygon (MATIC): +2.0%
• Cardano (ADA): +3.1%

Meme Coins

• Dogecoin (DOGE): -3.2%
• $TRUMP Token: -5.7%

Market Outlook

• Bitcoin remains in a tight range, reflecting uncertainty in the macroeconomic environment.
• A hawkish Fed stance could push Bitcoin lower, while dovish signals could support a potential recovery.
• Regulatory and ETF trends will continue to impact institutional demand for cryptocurrencies.