Bitcoin dropped to $66,000 as traders await the delayed January CPI inflation report, with the Crypto Fear & Greed Index near record lows at 9.
Bitcoin slumped to $66,000 on Friday as the crypto market braces for the delayed U.S. January CPI inflation report, a data point that could determine whether BTC reclaims $70,000 or tests the $60,000 floor.
Bitcoin fell roughly 4% on the day to trade near $66,700 on February 13, extending losses from a volatile week that saw BTC swing between $60,000 and $72,000. The Bureau of Labor Statistics is set to release the January Consumer Price Index at 8:30 AM ET, two days later than originally scheduled due to a partial government shutdown.
Wall Street consensus expects headline CPI at 0.3% month-over-month and 2.5% year-over-year, down from December's 2.7% annual rate. Core CPI forecasts range unusually wide, between 0.25% and 0.42%, reflecting elevated uncertainty about the path of inflation.
Ethereum is hovering near $1,990, down over 33% from its recent highs. Solana touched a two-year low near $84 earlier this week before recovering slightly. The Crypto Fear & Greed Index sits at 9, near its all-time low of 5 recorded on February 6, matching levels last seen during the FTX collapse.
CPI data directly shapes Federal Reserve interest rate expectations, which in turn drive liquidity flows into risk assets like crypto. A softer-than-expected inflation print could give the Fed room to cut rates sooner, potentially reversing the bearish momentum that has pushed Bitcoin down 47% from its October all-time high of $126,000.
Conversely, a hotter reading would likely strengthen the dollar and push Treasury yields higher, pressuring crypto further. The December CPI print came in hot, triggering a 5% to 8% drop in Bitcoin within 48 hours. Traders are positioned for a repeat scenario, with $1.2 billion in leveraged long positions at risk of liquidation below $65,000.
Bitcoin ETFs have provided a mixed signal. After weeks of outflows totaling over $750 million, spot Bitcoin funds recorded $167 million in net inflows on February 11, suggesting some institutional buyers are accumulating at lower levels.
The 8:30 AM ET release will set the tone for crypto markets heading into the weekend. A CPI reading below 2.5% could spark a relief rally toward $70,000, while anything above expectations may push BTC toward the $60,000 support tested last week. Beyond today's print, the next Federal Reserve meeting on March 18-19 will be the key event for rate policy guidance.
This is a developing story. The January CPI report could mark a turning point for crypto sentiment after weeks of selling pressure, but the unusually wide range of forecasts suggests the market is bracing for a surprise in either direction.
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Disclaimer: News content is for informational purposes only and should not be considered financial advice. Market conditions can change rapidly. Always conduct your own research.
