Inflation Moderates to 2.4%, What Signals Behind Bitcoin's Drop Below $70,000?

The latest Consumer Price Index (CPI) data shows that the U.S. annualized inflation rate remains stable at 2.4%, perfectly in line with market expectations and unchanged from the previous value. Although this figure indicates that price pressures are gradually easing, the crypto market has not rebounded as a result, but has instead experienced a significant correction, with the Bitcoin price once dipping below $70,000. Looking at the data details, the monthly CPI rose by 0.3% month-on-month, in line with expectations, slightly higher than the 0.2% in January; the core CPI monthly rate fell to 0.2%, lower than the previous month's 0.3%, suggesting that underlying inflationary pressures excluding food and energy have cooled slightly. Among the sub-items, gasoline prices continued to rise, while food, housing, and service prices saw slower growth, and used car prices continued their downward trend, presenting an overall pattern of moderate but uneven recovery.

It is worth noting that although inflation has been close to the Federal Reserve's 2% target for several months, it has not yet reached it, which keeps policymakers cautious. The market generally expects the Federal Reserve to maintain interest rates unchanged at the March 18 and April interest rate meetings, and may even extend the "higher for longer" monetary policy into the first half of 2026. This expectation of tightening liquidity directly suppresses the short-term speculative momentum of high-risk assets, including Bitcoin. At the same time, geopolitical factors have exacerbated uncertainty in the energy market. Tensions in the Middle East have pushed Brent crude oil prices above $110 per barrel, and this shock has not yet been fully reflected in the current inflation data, suggesting that future inflation may face the risk of rising again.

From a technical perspective, on-chain data shows that more and more Bitcoin is being held below its cost price, indicating that a large number of investors in the current market are in a state of floating losses. This phenomenon has historically been seen as an early signal of a shift in market sentiment towards conservatism. Although it does not necessarily indicate a sharp decline, it does reflect that the risk aversion psychology of coin holders is increasing. Combining the macro environment and capital flow trends, Bitcoin may continue its volatile consolidation pattern in the short term, and market sentiment is strong. The inflation data and Federal Reserve statements in the coming weeks will be key variables determining Bitcoin's direction.