Bitcoin experienced volatile trading before the release of US November inflation data, but reacted upwards after the CPI came in below expectations. The BTC price, which was trying to hold above the $87,000 level earlier in the day, settled in the $88,000 range following the data release and subsequent buying activity.
Bitcoin price fluctuates in a narrow range
Since the beginning of the week, the cryptocurrency market has been struggling to find direction. Bitcoin came under pressure after losing the psychological $90,000 threshold earlier in the week, and many altcoins followed suit. This cautious atmosphere in the market led to limited risk appetite before the release of US CPI data. Investors were focused on this critical data to clarify the impact of inflation on the Fed's interest rate path.
The November CPI data, released at 16:30 Turkish time, showed an annual rate of 2.7 percent. Market expectations were at 3.1%, while the previous month's data was recorded at 3.0%. The significantly lower-than-expected inflation figure strengthened expectations that the US Federal Reserve may adopt a more dovish stance in the coming period. At the same time, initial jobless claims came in at 224,000, in line with expectations, and there were no further surprises in the labor market. This situation led to short-term buying in Bitcoin. BTC, which was stabilizing around $87,000 before the data release, reacted upwards after the announcement, rising above the $88,000 level. As seen in the image, the price is trading near its intraday highs, while volatility remains high. Analyses published before the data release had a cautious tone. Nick Forster, founder of Derive.xyz, stated that Bitcoin positioning was clearly bearish. According to Forster, 30-day BTC volatility is climbing back to around 45%, while the skew in the options market is hovering around -5%. This outlook indicated that investors continued to price in downside risks throughout the first quarter of the year. The analyst assessed the probability of Bitcoin reaching $100,000 at approximately 30 percent, and the probability of returning to all-time highs at around 10 percent. On the technical side, the pre-CPI picture was also generating weak signals. Bitcoin had experienced a pullback of approximately 7 percent in recent days after being rejected from the falling trend line. However, with the inflation data falling below expectations, a space has emerged for the market to reposition itself in the short term. If Bitcoin maintains its closing above $85,500, a technical recovery towards the $94,000 level remains a possibility. In the alternative scenario, the loss of this support could lead to the psychological threshold of $80,000 coming back into play. In summary, the November CPI data created a short-term breathing space for the crypto market. While Bitcoin's initial reaction was positive, both the continuation of macroeconomic data and the technical levels need to be closely monitored for the medium-term direction. In this period of high volatility, market sensitivity to Fed expectations remains a key factor.
