Bitcoin Loses Its Chance to Set a New High Thanks to CPI Increase
Bitcoin fell form near record highs down to $107K after the CPI rose on Wednesday, but underlying factors show incredible potential.
Quick overview
- Bitcoin (BTC) experienced a decline to $107,004 after the consumer price index showed a smaller-than-expected increase in inflation.
- Despite the drop, Bitcoin's supply is tightening as investors accumulate coins and store them in cold wallets, leading to decreased liquid supply.
- The demand for Bitcoin is rising, and with less selling pressure, it is poised for potential value increases, especially with upcoming economic reports.
- Investor confidence in Bitcoin is growing, suggesting that a new all-time high could be on the horizon.
After closing in on a new record near $100K, Bitcoin (BTC slipped on Wednesday following the release of consumer price index numbers showing an increase in this important inflation metric.
The CPI was expected to increase this week by 0.2%, but it instead climbed just 0.1%. This knocked Bitcoin off its perch right near a new record high and kicked it down to $107,004 (BTC/USD). Bitcoin should have been buoyed by news that China and the United States have come to an agreement over tariffs, for now. But the coin is down by 2.41% today.
This could be the perfect time for investors to get on board with Bitcoin or double down on their investments. Bitcoin may surge later today after new economic reports are released covering jobless claims and PPI (Producer Price Index).
Bitcoin Supply Tightening Up
Bitcoin holders are accumulating lots of bitcoins slowly, which means that the supply side is looking dry. The demand for Bitcoin is on the rise, especially with the potential for a new all-time high on the horizon. A lot of the Bitcoin now being held is in cold storage and in wallets and is not being used freely. That means that there could be a shortage of BTC in the near future, which could spike the value considerably.
There is less Bitcoin ready to be dumped should the market quickly move one way or the other. This appears to be an issue of crypto accumulation, and since the start of 2025, we have seen a 14% decrease in Bitcoin held on centralized crypto exchanges. That is the lowest those numbers have gone in three years.
What this means for investors is that consumer confidence in Bitcoin is on the rise. There is less liquid supply out there to be gotten, and Bitcoin is likely to shoot up in value as a result. Despite sticky inflation, a tough economy, and high tariffs, Bitcoin can sidestep all of that and see its value shoot up on the basis of its availability.
With less selling pressure affecting Bitcoin, it is likely that the coin will hold onto its gains and will be very unlikely to slip much further. Whenever the market shifts downward, because of the lack of selling pressure, Bitcoin should be able to hold fast and make a quick comeback from a strong position. We should see a new record high for the coin very soon as a result.
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