What this week's inflation data may mean for Bitcoin & Crypto

Ben Graham · February 12

Investors are holding their breath for this Friday’s delayed inflation report, and for good reason.

After a surprisingly strong jobs report rattled the markets earlier this month, all eyes are on the Consumer Price Index (CPI) to see what the Federal Reserve might do next.

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Why Inflation Data Moves Bitcoin Price

When inflation is high, the Fed hits the brakes by keeping interest rates high. Higher rates make borrowing expensive, which usually encourages investors to pull money out of “riskier” assets like Bitcoin and tech stocks in favor of safer bets.

Recently, we saw a “hot” labor report showing the economy added 130,000 jobs.

January jobs report: private hiring surges, government jobs shrink.

Nonfarm payrolls up 130K, total employment up 528K, federal employment now lowest since 1966.

The labor market is shifting to the private sector. Draining the swamp works! pic.twitter.com/7dTYVdXue3

— Stephen Moore (@StephenMoore) February 11, 2026

While that sounds great for workers, markets took it as a sign that the economy isn’t cooling enough for the Fed to cut rates. As noted in recent expert analysis on macro-driven turbulence, this “good news is bad news” dynamic is currently keeping a lid on price appreciation.

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What Traders Are Watching This Week

Forecasts predict the YoY inflation rate will drop to 2.5%, down from the previous month. As a result, this could reinvigorate hopes for a rate cut.

Derek Lim, head of research at Caladan, said that this metric is currently “more important than employment data,” noting that lower-than-expected inflation would pile pressure on the Fed to ease financial conditions. That would be a green light for risk assets.

(Source: BTCUSD / TradingView)

Currently, Bitcoin is stabilizing around $68,500 after correcting from its highs. It is caught in a tug-of-war between technical support levels and macro anxiety.

While traditional finance giants debate whether crypto is a valid asset class during uncertainty, the market is looking for a floor. A hot inflation print could push that floor lower, while a cool print could spark a relief rally.

So, what should you do? First, expect volatility on Friday morning when the CPI release hits the wires.

If the numbers come in hot, we might see a sharp dip in Bitcoin USD prices as traders price in a “higher-for-longer” interest rate environment.

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