BTC price shock as U.S. CPI report delivers an unexpected surprise, with inflation cooling faster than anticipated.

The latest U.S. core Consumer Price Index (CPI) report delivered an unexpected surprise, with inflation cooling faster than anticipated. As a result, market expectations for rate cuts have surged.

The latest U.S. core Consumer Price Index (CPI) report delivered an unexpected surprise, with inflation cooling faster than anticipated.

Core CPI came in at 3.1%, slightly below the projected 3.2%, while headline inflation also saw a minor decline, according to the Bureau of Labor Statistics.

As a result, market expectations for rate cuts have surged, with the probability of a May cut jumping to 31.4%, more than tripling from last month. Similarly, forecasts for three rate cuts by year-end have spiked fivefold to 32.5%.

The likelihood of four cuts has surged from a mere 1% to 21%.

"With today’s data adding to the case for rate cuts and risk assets rallying in response, it’s possible that recession risks have already been fully priced in," Crypto Research Strategist at 21Shares, Matt Mena, said in an email sent to AMBCrypto.

"Bitcoin has rebounded, retesting $85K, while index futures push higher. This dynamic suggests that any rate cuts materializing this year could unleash a flood of liquidity, propelling equities and crypto higher."

Despite the cooling inflation, Bitcoin’s price has struggled to maintain momentum, slipping from over $84,000 to around $83,000 as traders weighed the impact of President Trump’s trade policies and broader macroeconomic uncertainty.

According to the latest data from CoinMarketCap, BTC was trading at $83,030.57, reflecting a modest 0.57% gain in the past 24 hours.

"With inflation cooling and recession fears still looming but not worsening, Bitcoin could be on the verge of its next major breakout, pushing past the stubborn sub-$90K range," Mena added.

"A decisive move beyond this level could see BTC testing $95K resistance before making a run toward the highly anticipated $100K mark, solidifying its place in six-digit territory."

While the market seems to be optimistic about potential rate cuts, Federal Reserve officials, including Chairman Jerome Powell and Governor Christopher Waller, have reiterated their cautious stance on rate cuts, signaling no rush to ease policy.

However, analysts warn that delaying cuts could trigger a bear market in the coming months.

In fact, investor Anthony Pompliano speculated on 10th March that President Trump might be deliberately pressuring financial markets to force the Fed into action.

"Is this a master plan or are we watching uncontrolled destruction?!" he questioned.

Mena further highlighted that the Crypto Fear and Greed Index has plunged to levels not seen since the Terra Luna collapse, reflecting heightened market anxiety.

However, shifting narratives suggest a potential turnaround.

With Jerome Powell recognizing Bitcoin as "digital gold," analysts see this as a step toward broader acceptance.

Additionally, expectations of interest rate cuts and monetary expansion could provide a much-needed boost to Bitcoin and the broader crypto market, setting the stage for a potential recovery.