Bitcoin Jumps to $69K as US CPI Cools, but Rate Cut Bets Stay Muted

Bitcoin surged toward $69,000 on Feb. 14 after January’s US Consumer Price Index came in softer than expected, with headline inflation printing at 2.4% versus the anticipated 2.5%.

The relief rally offered a brief reprieve for crypto bulls watching key resistance levels, though market expectations for Federal Reserve rate cuts remain surprisingly low. For crypto traders, this inflation reading reinforces the delicate dance between macro data and risk asset appetite, with Bitcoin’s reaction suggesting the market remains hungry for any signal that liquidity conditions could ease in the months ahead.

Bitcoin Spikes as January CPI Comes in Cooler Than Expected

The Bureau of Labor Statistics dropped its January inflation report at 8:30 a.m. New York time, and the numbers landed with a distinctly soft tone. Headline CPI registered at 2.4% year over year, slightly undershooting the 2.5% consensus that traders had baked into their positioning. Core inflation, which strips out volatile food and energy components, held steady at 2.5% annually, matching expectations precisely.

Bitcoin reacted immediately. The largest cryptocurrency by market cap climbed roughly 4% within hours, touching $69,190 on Bitstamp as Wall Street opened for trading. The move represented one of the sharpest intraday reactions to macro data in recent weeks, underscoring just how tightly crypto has become tethered to the inflation narrative.

Looking inside the numbers reveals why markets paid attention. On a monthly basis, headline inflation rose 0.2%, while core climbed 0.3% on a seasonally adjusted basis. Shelter costs, that stubborn component that keeps economists up at night, increased 0.2% for the month and now sit 3.0% higher over the past year. Energy provided meaningful relief, falling 1.5% in January alone, with gasoline dropping 3.2% on a seasonally adjusted basis.

The Kobeissi Letter highlighted the significance in a post on X, noting that core CPI inflation now rests at its lowest level since March 2021. “Odds of further interest rate cuts are back on the rise,” the trading resource observed, capturing the market’s immediate interpretive reflex.

Yet the celebratory tone comes with complications. The BLS noted that CPI data for October and November 2025 remains unavailable due to last year’s government shutdown and subsequent lapse in appropriations. The Cleveland Fed’s nowcasting page explicitly flags these missing releases, meaning models and proxies now carry heavier weight in constructing the inflation narrative. When the official record contains holes, confidence becomes part of the story alongside the data itself.

Why Fed Rate Cut Expectations Aren’t Rising Despite Cooler Inflation

Here’s where the narrative gets interesting. Despite the softer inflation print, market pricing for Federal Reserve rate cuts remains surprisingly restrained. The CME Group’s FedWatch Tool shows odds of a quarter-point cut at the March meeting holding below 10%, essentially unchanged from before the CPI release.

This disconnect between inflation relief and policy expectations tells us something important about how traders are processing the macro environment. The Federal Reserve’s January statement maintained that inflation “remains somewhat elevated,” a deliberate choice of words that signals no urgent pivot toward easing. Two FOMC members, Stephen I. Miran and Christopher J. Waller, actually dissented at the January meeting and preferred implementing a quarter-point cut immediately, but their minority position only highlights the broader committee’s cautious posture.

The 2-year Treasury yield, currently sitting around 3.52%, offers another window into this dynamic. That yield competes directly with risk appetite by establishing a baseline return for doing very little with capital. When yields stay competitive, the opportunity cost of holding volatile assets like crypto rises, and that mathematical reality doesn’t disappear just because one inflation print lands slightly below expectations.

Andre Dragosch, European head of research at Bitwise, offered a useful perspective when he noted that through the lens of Truflation’s alternative inflation meter, this CPI drop “was not really a surprise.” The market may be pricing not just today’s data but the recognition that alternative measures had already signaled this softening weeks ago.

The $307 Billion Question: Stablecoin Liquidity Waits on the Sidelines

While Bitcoin rallies on CPI news, the broader crypto ecosystem sits on a massive pile of dry powder that tells its own story about market psychology. DefiLlama’s tracker puts total stablecoin market capitalization at approximately $307 billion, a staggering pool of cash-like liquidity that traders use to rotate into volatile assets when conviction builds.

This stablecoin base functions as a real-time sentiment gauge. When the pool grows, it typically signals that market participants want optionality, the ability to move quickly when opportunities emerge. When it stalls or contracts, it often suggests capital prefers yield and certainty elsewhere.

Right now, $307 billion represents a lot of waiting. It’s capital that could deploy into Bitcoin, Ethereum, or altcoins within minutes, yet it sits in dollar-pegged form, earning minimal yields while watching the macro calendar. The February CPI print absorbed some of that liquidity, with Bitcoin’s 6% intraday climb representing real buying pressure. But the question hovering over the market is whether this represents the beginning of sustained momentum or just a brief relief rally before the next resistance test.

Bitcoin’s repeated failures to breach $71,500 in recent weeks add weight to the cautious interpretation. Each attempt gets slapped back down, creating a pattern of lower highs that technical traders watch closely. The stablecoin base could fuel a genuine breakout, but it hasn’t yet chosen to do so at scale.

Technical Levels Tell the Story: Bitcoin Searches for a Higher Low

Price action traders see something specific playing out on Bitcoin charts right now. Daan Crypto Trades, a well-followed market observer, noted in his latest X update that BTC continues consolidating within a falling wedge pattern. “Attempted a break out yesterday but got slammed back down at the $68K level,” he wrote. “That’s the area to watch if this wants to see another leg up at some point.”

The $68,000 to $69,000 zone carries technical significance beyond just the CPI reaction. This range hosts both the old 2021 all-time high and Bitcoin’s 200-week exponential moving average, two levels that institutional traders and algorithms monitor closely. Breaking above with conviction would signal something meaningful; getting rejected reinforces the range-bound narrative.

Michaël van de Poppe, the crypto trader, analyst, and entrepreneur known for his macro-focused approach, sees this moment as potentially constructive. “Whether you like it or not: Bitcoin remains to be in an area where I think that we’ll see a higher low come in,” he predicted in his own forecast. “It’s fragile, for sure, but it doesn’t mean that we’re not going to be seeing some momentum coming in from the markets.”

The higher low concept matters in technical analysis because it suggests underlying strength even when price can’t break to new highs. Each pullback that stops above the previous low builds a staircase pattern that eventually resolves upward. Van de Poppe’s caution about fragility acknowledges that this pattern isn’t guaranteed, but his willingness to highlight the higher low possibility suggests the structure remains intact for now.

Three Paths Forward: How Inflation Scenarios Shape Crypto’s Trajectory

Stepping back from the immediate price action, the macro backdrop suggests three distinct paths forward, each carrying different implications for Bitcoin and broader crypto markets.

The steady cooling path has headline inflation drifting toward the low 2% range, with core following gradually and shelter costs continuing their slow easing. The Cleveland Fed’s nowcast currently sits in this neighborhood, projecting February CPI at 2.36% year over year. In this world, rate cuts become easier to justify later in the year, financial conditions loosen, and crypto tends to benefit from the emotional shift from bracing against headwinds to actively deploying capital.

The sticky inflation path sees services categories printing firm month after month, shelter remaining persistent, and energy ceasing to provide the disinflationary help it offered in January. The Fed stays cautious in this scenario, a posture already embedded in the January rate decision. Yields stay competitive, liquidity remains selective, and crypto can still rally but experiences sharper pullbacks when the opportunity cost of holding risk feels high.

The growth wobble path combines cooling inflation with a softening real economy, prompting policy easing to arrive sooner than anticipated. Risk appetite goes through a more emotional ride in this scenario, with initial selloffs on growth concerns followed by relief rallies on policy response. The IMF’s global growth projections at 3.3% for 2026 leave room for both resilience and shocks, and that uncertainty becomes part of every trade.

Across all three paths, the $307 billion stablecoin base functions as a simple scoreboard for crypto-specific liquidity. That’s a lot of potential buying power, and it’s also a lot of capital that can remain in cash-like form when yields look attractive relative to crypto’s volatility profile.

What’s Next: March Dates Anchor the Calendar

The market never waits for the next release; it starts pricing expectations the moment the last number lands. That’s where nowcasts come in, especially with the data gap from last year’s shutdown sitting in the background.

The Cleveland Fed’s nowcast, updated Feb. 12, pencils in February CPI at 2.36% year over year, with core at 2.42%. Month-over-month estimates show 0.22% for headline and 0.20% for core. These are model estimates, not official prints, but they shape expectations in real time, and expectations shape positioning.

The official calendar has two dates circled in bright ink. March 11 brings the February CPI report at 8:30 a.m. ET, and March 17-18 brings the next FOMC meeting, with the statement and press conference scheduled for March 18. That meeting lands after the next inflation data, and it lands in a year when policymakers have already sketched a path pointing toward lower rates over time.

The Fed’s Summary of Economic Projections shows a median expectation for the fed funds rate at 3.4% by the end of 2026, with median core PCE inflation at 2.5% for the year. In plain language, officials see rates drifting down as inflation cools gradually, and the range of outcomes stays wide enough to keep every data point meaningful.

Between now and then, traders will monitor shelter costs, Treasury yields, and the stablecoin base, watching for clues about which path the economy is actually walking. The January CPI print offered relief, but it didn’t settle the argument. It just set the stage for the next act.