• A Consumer Price Index (CPI) release in the US at 8:30 am EST was used to decide whether it is a bull or bear market in the short term.
• Most estimates agreed that 6.5% is the magic line that will decide whether it is a bull or bear market in the short term.
• JP Morgan had released its own game plan and called for a 65% chance that CPI will be between 6.4% and 6.6%, which could trigger a 1.5% to 2% upside move in the S&P 500.
The Bitcoin price has been a source of speculation for the rest of January as investors try to predict whether there will be a bull or bear market. To help guide their decision, the US released its Consumer Price Index (CPI) at 8:30 am EST, which serves as a benchmark for the market. It was estimated that 6.5% would be the ‘magic line’ that dictates whether it is a bull or bear market in the short term.
If the CPI figure is 6.3% or lower, then it is likely that investors will see a bull run, as the US central bank projections from the last FOMC are no longer credible and will be thrown overboard. If the figure is 6.5% to 7.1%, then a sell-off is likely.
JP Morgan had released its own game plan for the CPI release, estimating that there was a 65% chance that CPI would be between 6.4% and 6.6%. This could trigger a 1.5% to 2% upside move in the S&P 500. In the worst-case scenario, CPI is above 6.6%, which could mean a 2.5% to 3.5% downside for the S&P 500, according to JP Morgan.
In the end, the CPI figure came in at 6.5%, which suggests that the market will celebrate with restraint. As Bitcoin trades, investors will be keeping a close eye on the CPI and other factors to try and predict the Bitcoin price for the rest of January.