Cryptocurrency Analyst Benjamin Cowen Discusses the Latest Consumer Price Index Report and Its Potential Impact on Bitcoin (BTC) and the Broader Market

Cryptocurrency analyst Benjamin Cowen discussed the latest Consumer Price Index report and its potential impact on Bitcoin BTC/USD and the broader market

Renowned cryptocurrency analyst Benjamin Cowen has shared his thoughts on the latest Consumer Price Index report and its potential implications for Bitcoin (CRYPTO: BTC) and the broader market, highlighting the delicate balance between inflation and unemployment rates.

What Happened: In his latest podcast on Wednesday, Cowen discussed how the 10-year Treasury yield affects Bitcoin's price action.

He pointed out that Bitcoin struggled in 2023 when yields rose and only recovered once yields peaked. This suggests that Bitcoin may face further headwinds if yields continue to climb.

Cowen also warned that a significant rise in either inflation or unemployment could disrupt the market cycles that he has been tracking, increasing the likelihood of a left-translated cycle — meaning Bitcoin's peak could come earlier than expected.

“The two things that matter the most for a favorable market cycle, if you will, or a normal market cycle, is that both of these two metrics have to be behaving themselves,” said Cowen, referring to inflation and unemployment rates.

“If either of those two metrics go up a lot — if there’s a big spike in the inflation rate or a big spike in the unemployment rate — then the odds of a left translated cycle would go up a lot. This means Bitcoin's peak could come earlier than expected.”

Cowen noted that headline inflation came in slightly above expectations at 3.3%, continuing an upward trend since the Federal Reserve began cutting interest rates in September 2024.

While acknowledging similarities to the 1970s inflation pattern, Cowen doesn't believe a repeat of that scenario is the most likely outcome.

He emphasized the importance of the Fed's response, saying, “As long as the FED doesn’t cave you know to political pressures and aggressively cut interest rates more than they really need to,” a severe inflationary spiral could be avoided.

Why It Matters: Recent data has shown a sticky inflation pattern, with headline inflation remaining stubbornly high despite the Fed's efforts to curb it through interest rate hikes.

The central bank is now pivoting to smaller rate hikes and pausing later in 2025.

Economists widely expect the unemployment rate to rise in the coming months as the impact of the Fed's rate hikes on the economy becomes more evident.

Higher unemployment could put pressure on the Biden administration and the Fed to ease monetary policy, potentially leading to a rise in inflation.

Cowen's analysis suggests that a favorable market cycle, as he has been tracking it, is contingent on both inflation and unemployment rates remaining “well behaved.”

A significant deviation in either metric could alter his projections and impact Bitcoin's price trajectory.

See More: Raoul Pal Predicts Bitcoin To Hit $250,000 To $350,000 Under One Condition