The Consumer Price Index (CPI) for January was much higher than anticipated, causing a significant drop in crypto values. Bitcoin's price fell to $94,200 but quickly bounced back to $95,500. Typically, after major economic data is released, the market's initial response is the most telling of the overall sentiment, with subsequent reversals often occurring to oust late long and short positions before the prevailing trend continues. Given the unexpected CPI results, BTC might test the $91.2k support level once more. However, savvy investors are reportedly taking advantage of the dip, with Bitcoin, Ethereum, BNB, and low-cap meme coins seeing increased interest. How Does the Hot CPI Affect the Crypto Bull Market? For some time, crypto prices have been sensitive to worries about rising inflation. Last week, Bitcoin's value slid from $102k to $95k by Tuesday, largely influenced by persistent inflation, a strong US Dollar, and high treasury yields. But January's CPI surprised the market, with overall inflation increasing by 3% year-over-year, surpassing the 2.9% prediction. Core CPI, which excludes food and energy, rose by 3.3% year-over-year, beating the expected 3.1% rise. 🚨 Just In: January US CPI annual inflation rises 3.0%, above expectations for 2.9%.Core CPI inflation increased 3.3% Y/Y, higher than forecasts for a gain of 3.1%. pic.twitter.com/xREyjJpCry — Jesse Cohen (@JesseCohenInv) February 12, 2025 Importantly, overall inflation is not heading in the desired direction, increasing for four months in a row instead of moving toward the Fed's 2% target. Consequently, traders are now expecting that the Fed won't cut rates until December. Following the hot CPI data, the US Dollar Index (DXY) has climbed back above 108, and long-term treasury yields are on the rise, both developments posing short-term challenges for the crypto market. Why Are Experts Still Optimistic About Crypto? Despite the hot CPI figures, many savvy investors remain confident that the crypto bull market is far from over. For example, Chartered Financial Analyst Julian Bittel predicts that global liquidity will continue to grow, even with a pause in rate cuts and the Fed delaying quantitative easing. Unsurprisingly, crucial indicators, such as the Bitcoin GMI cycle top finder, still suggest that the cycle top is not yet near. Moreover, renowned trader Bluntz and several others believe the US Dollar is approaching its peak and will likely weaken over the next one to two years, setting the stage for a significant rally in risk assets. very nice rejection from $dxy so far, this has defo topped for the next 1-2 yrs imo. https://t.co/bcdTXPxFRG pic.twitter.com/JtHOBxwEXn — Bluntz (@Bluntz_Capital) February 5, 2025 In this context, any downturn in crypto prices might be a prime opportunity for investors who have been waiting to enter the market. Top Cryptos to Consider Buying During the Dip Bitcoin's bounce back to $95,500 after the CPI news shouldn't be misleading. The initial market response is always the most telling, and BTC might dip again to the $91.2k support level. However, this situation presents another chance for investors who have been on the sidelines to get ready for the upcoming bull market. For instance, despite Ethereum's price drop last week due to inflation fears, large investors acquired over 600,000 ETH coins. Whales have bought over 600,000 #Ethereum $ETH in the past week! pic.twitter.com/y736DxlGSP — Ali (@ali_charts) February 12, 2025 If these seasoned investors are correct, it might be the perfect time to go all-in on ETH and Ethereum meme coins. Meanwhile, the BNB ecosystem is demonstrating significant bullish momentum. BNB's price has risen by 15% over the past week, with Pancake Swap surging by over 70% in the same timeframe. Clearly, large investors are buying the dip. Low-cap meme coins are experiencing high demand as well. For example, Solaxy (SOLX) has raised nearly $20 million during its ICO, with many considering it a potential 10x investment. Solaxy stands out as the first major Solana Layer-2 token, aiming to provide remarkable scalability and zero downtime to the Solana blockchain. Given its ambitious objectives, it's no wonder experts view it as undervalued during its presale. Similarly, a newly launched meme coin, BTC Bull (BTCBULL) , has already raised nearly $1 million in just over a day. This project rewards its token holders with free Bitcoin airdrops when the BTC price reaches certain levels, besides offering BTCBULL burn events and staking rewards. Many are already predicting that BTC Bull could be the next meme coin to achieve 100x returns.
