With Bitcoin‘s BTC / USD Price in difficulty and we Inflation data exceeding expectationsMarket analysts recommend that cryptographic investors occupying long positions prioritize downward protection and closely monitor institutional flows.
After the publication of warmer than expected inflation data, Bitcoin experienced a drop of 2% at levels less than $ 95,000, highlighting volatility and current uncertainty in the cryptocurrency market.
Ethereum ETH / USD reflected this trend, also decreasing by around 2%, while other major altcoins, especially Solara SOL / USD,, Xrp XRP / USD And Mastiff DOGE / USDExperienced drops between 2% and 3.5%.
Data from the Consumer Price Index (IPC) has revealed an increase in higher inflation than expected, attenuating expectations for the milestone interest rate reductions.
The IPC increased to 3% from one year to the next in January, exceeding the forecasts of economists.
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Why is it important: A report of QCP capital suggests that cryptographic investors occupying long positions should be cautious.
The report underlines that “for participants who always occupy long positions in crypto, after institutional flows and the purchase of downward protection can be the best strategy”, in particular because put options remain relatively inexpensive.
The QCP report notes that Bitcoin has underperformed traditional actions and gold.
The increase in inflation has led to a rally in the US dollar index and an increase in treasury yields, exerting pressure on risk assets such as cryptocurrencies and gold.
Gold itself dropped by 1% after the release of data.
Addition of perspective, Chuck ZhangCFO of Polyfluize Benzinga said that in the coming months will be essential for the cryptography market while the Trump administration clarifies its position on the industry.
Although the initial reaction to Trump’s Crypto decree could have been attenuated, Zhang remains optimistic about the potential of the future bullish impulse.
“The opening of President Trump to an American crypto reserve changes the situation and could fuel the bullish momentum in the short term while demonstrating that the United States is serious to dominate cryptographic space,” he said .
He added that the potential approvals of Solana and XRP ETF and a US Strategic bitcoin reserve could stimulate the new levels of institutional adoption.
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