Bitcoin (BTC) Price May Soon Surge as Truflation's Real-Time Inflation Data Points to a Recurring Phenomenon

In the March 27, 2025 analysis, titled “Where is Bitcoin headed next? A Signal hidden in Real-Time Data,” Truflation highlights a recurring phenomenon:

In its March 27 analysis, titled “Where is Bitcoin headed next? A Signal hidden in Real-Time Data,” macroeconomic intelligence firm Truflation claims that each time its inflation index shows a strong downtrend that later pauses or reverses, Bitcoin has a tendency to surge afterward.

The analysis highlights the broader macroeconomic backdrop. It began with the outbreak of COVID-19, which led to central banks slashing interest rates to nearly zero and injecting liquidity into the economy. This period of easy monetary policy coincided with Bitcoin’s ascent to all-time highs in 2021.

However, by 2022 and 2023, inflation remained elevated, pushing the US Federal Reserve to adjust its strategy. Its focus shifted to raising interest rates and reducing its balance sheet—better known as quantitative tightening—in an effort to control price pressures. The goal, stated by the Federal Reserve, was to bring consumer price inflation down to 2%.

According to Truflation’s report, its own real-time inflation readings reached a low of 2% in June 2023. The official Consumer Price Index (CPI), published by the Bureau of Labor Statistics, followed a similar pattern about a month and a half later, bottoming out at 3% in July 2023.

But from mid-2023 onwards, Truflation’s index did not simply keep dropping in a straight line. Instead, it oscillated between higher and lower bounds, displaying a cyclical pattern of disinflation that would then stabilize or reverse course.

According to Truflation, each of these cyclical “inflection points” closely correlates with subsequent upswings in Bitcoin’s price. The report highlights four distinct periods—September 2023, November 2023, September 2024, and December 2024—when its index was trending downward before flattening or rebounding. In each of those cases, Bitcoin’s price went up soon after.

“When Truflation’s disinflation trend pauses or reverses, Bitcoin tends to rally shortly after. This pattern has repeated a few times already — and if history rhymes, it may be unfolding once again soon,” the analysis states.

Breaking down the reason for this occurrence, Truflation says it boils down to Bitcoin’s forward-looking nature and its sensitivity to shifts in liquidity conditions. Strong disinflation usually sparks speculation that the Federal Reserve may be done raising rates and could soon become more accommodative, cutting rates.

While a steep and unrelenting disinflation might trigger fears of a recession, a slowdown or pause in that disinflation trend often reassures markets that the economy is not sliding into an economic downturn. This “soft landing” scenario, in turn, tends to foster risk-on sentiment. Traders and investors who anticipate that inflation has been sufficiently subdued to delay any additional tightening—or to accelerate rate cuts—channel their optimism into assets like Bitcoin.

The report acknowledges that no single piece of data, including Truflation’s own, has an overriding influence on an asset as multifaceted and heavily traded as Bitcoin. However, it highlights that real-time inflation expectations have a broad impact on global markets, also affecting equities, commodities, and foreign exchange trading in addition to cryptocurrencies.

Anticipating the shifts in those expectations, some investors may find themselves ahead of the curve when the official CPI reports and central bank pronouncements ultimately confirm or contradict the unfolding trend.

“Truflation doesn’t influence Bitcoin in a vacuum. No single data source ever does. But inflation expectations ripple across a wide range of markets — from equities to commodities — and especially into bond yields and forex.”