BTC faces potential decline as gold surges to 1-month peak following US inflation report
Bitcoin bulls suffered losses approaching 3% as elevated US Producer Price Index data propelled precious metals higher while triggering cryptocurrency selloffs.
Bitcoin (BTC) experienced continued downward pressure as Friday's Wall Street trading session commenced, following US inflation figures that exceeded market forecasts.
Key points:
- Bitcoin price downside strengthens as US inflation data comes in hot.
- Gold and silver benefit from a risk-off response to January PPI data.
- Bitcoin price expectations face the prospect of a rocky monthly candle close.
Bitcoin experiences selling pressure following elevated US PPI figures
According to TradingView data, BTC price losses on Bitstamp approached 2.5% during the trading day, concurrent with gold reaching price levels not witnessed since the final days of January.
The Producer Price Index (PPI) reading for January registered significantly higher than market predictions, coming in at 0.5% on a month-over-month basis compared to the expected 0.3%, according to information released by the US Bureau of Labor Statistics (BLS).
The core PPI metric delivered an even more dramatic surprise, registering 0.8% month over month against the forecasted 0.3%.
"The January increase in prices for final demand can be traced to a 0.8-percent advance in the index for final demand services. In contrast, prices for final demand goods declined 0.3 percent," an official statement added.
As US inflation demonstrated a faster-than-anticipated upward trajectory, pressure mounted on risk assets, whereas traditional safe-haven investments delivered stronger performance.
The precious metal gold surpassed the $5,200 per ounce threshold, while silver climbed back toward $92, marking its strongest performance since Jan. 30.
Market expectations regarding potential interest-rate reductions by the Federal Reserve during its March policy meeting dropped to less than 4%, based on current data from CME Group's FedWatch Tool.
Concerns emerge regarding potential "massive collapse" in BTC price
As attention turned toward the approaching monthly close, participants in Bitcoin markets maintained a cautious stance.
Michaël van de Poppe, a crypto trader, analyst and entrepreneur, cautioned about the possibility of a repeat scenario similar to early February, when BTC/USD recorded 15-month lows in the vicinity of $59,000.
"Pretty crucial area for me to hold on to. I'd highly favor that $BTC finds a higher low at $65k," he wrote in his latest analysis on X.
"However, last day of the month; remember last month? A massive collapse on the markets. Let's see what it brings: holding $65K opens up the scenario to run up from here."
Previously, Cointelegraph provided coverage on critical resistance zones that bulls need to recapture, most notably the 200-week exponential moving average (EMA) alongside former all-time highs situated around $69,000.
As of this writing, BTC/USD performance was approximately equivalent to February 2025 levels, with monthly declines approaching 17% month-to-date.
The trading pair was on track to register its fifth consecutive monthly decline, a pattern not observed in the historical data since 2018, according to information verified by CoinGlass.
