Bitcoin traders are showing “heightened sensitivity” to inflation news.
This is according to the prominent crypto intelligence platform Santiment Feed.
In a Thursday, February 13 report, the firm disclosed that Consumer Price Index (CPI) discussions across social media platforms were at 15-month highs, showing significant concern, especially among retail Bitcoin traders.
Still, the firm has argued that a trading opportunity for savvy market participants could lie in this heightened sensitivity.
“Sell the Rumor, Buy the News?”
For context, the Santiment Feed report follows Wednesday’s hotter-than-expected U.S. inflation data release. Santiment highlights that shortly before the news broke, Bitcoin dipped 2% to around the $94,000 price point, only to rebound to the $98,000 level moments after the data release.
The platform argued that this could herald a profitable pattern for speculators looking to gain from short-term market volatility, arguing that market participants can expect retail traders to exit on the rumors of high inflation numbers and big players to step in to scoop up coins lower, sending the price higher after the fact.
“… this may be shaping up to be a ‘sell the rumor, buy the news’ scenario,” Santiment asserted.
Stronger-than-expected inflation numbers are currently seen as bad for risk assets like crypto as they reduce the chances of the Federal Reserve carrying out more interest rate cuts, which typically benefit the markets.
The crypto market’s recent weeks-long drought has largely been attributed to the Federal Reserve’s December 2024 decision to halve its rate cut projections for 2025.
With the market yet to decide on a clear direction, Bitcoin is trading around the $96,000 price point at the time of writing.
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