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Bitcoin (BTC) fell immediately on the latest United States consumer price index (CPI) data on Feb. 10 in a surprise move that deflated bulls. 

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Spot the Bitcoin bear trap

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it dropped $1,800 after January’s CPI print came in at 7.5%.

Despite being 0.2% higher than expected, surging inflation failed to have the positive impact on risk assets such as Bitcoin that characterized recent months.

Given the pace of year-on-year price increases, analysts argued, the Federal Reserve may now have more impetus to begin interest rate hikes sooner.

“The Consumer Price Index (CPI) results for the U.S.A. are coming in at 7.5% year-over-year, the expectations were 7.3% year-over-year. DXY is shooting up and risk-on assets are dropping down like Bitcoin & equities,” Cointelegraph contributor Michaël van de Poppe reacted.

Russell 2000 e-mini CME futures. Source: TradingView

The small-cap Russell 2000 index futures of U.S. listed companies dropped 2% right after the economic data was announced. This data confirms van de Poppe’s assessment, although both the equities index and Bitcoin fully recovered from that price drop over the next hour.

“Likelihood that the FED will start rate hikes in March”

Fellow trader and analyst Scott Melker, known as the “Wolf of All Streets,” was unimpressed by the market.

For economist Lyn Alden, however, it was cash savers with inflation that was dealing the real pain. 

“Official inflation currently has its biggest gap over short-term interest rates since 1951,” she noted alongside a chart.

“People holding cash in a bank or T-bills over the past year lost over 7% of their purchasing power.”

U.S. CPI vs. effective federal funds rate chart. Source: Lyn Alden/ Twitter

BTC price recovers above $44,000

No sooner had Wall Street trading begun on Feb. 10, however, did Bitcoin not only reverse its losses but put in a higher high of nearly $45,400.

Related: Bitcoin centers on $44K as BTC price MACD delivers long-awaited bull signal

BTC/USD likewise avoided a retest of recent support, with $42,000 and lower still yet to see a retest.

Previously, Cointelegraph reported on the likely resistance zones now in play for bulls to grapple with to continue higher.

“A Bitcoin uptrend in the face of macro uncertainty would be quite powerful. Shifts the narrative from TradFi’s court with BTC being a risk-on asset to purely a story of global adoption and ensuing game theory. Have to wonder how many macro bros have offloaded inventory by now,” analyst William Clemente added on the day.