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Here’s why Bitcoin traders shouldn’t overanalyze US inflation data

Published 02/11/2022, 04:30 PM
Updated 02/12/2022, 06:20 PM

Analysts and pundits will scramble to find some angle to explain intra-day price action whenever important economic numbers are published and this practice is commonplace in the crypto sector.

When the United States Bureau of Labor Statistics reported a 7.5% increase in the Consumer Price Index (CPI) on Feb. 10, traders rushed to find some connection to the crypto price action. However, historical correlation data shows investors should actually closely scrutinize whether there is even a relation between Bitcoin (BTC) and major economic indicators.

U.S. CPI (orange, left) vs. Bitcoin/USD (blue, right). Source: TradingView
Bitcoin, S&P500, WTI Oil, and TIP ETF 30-day correlation charts. Source: TradingView

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Latest comments

in 102 days Bitcoin has lost $22,199 and in value's clear to say we are entering taxpayers season. #bitcoinisfalling
very easy answer to the headline, inflation and BTC have nothing to do with each other.
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