Could Inflation, Unemployment Derail The Bitcoin Bull Run?

Cryptocurrency analyst Benjamin Cowen discussed the latest Consumer Price Index report and its potential impact on Bitcoin BTC/USD and the broader market, emphasizing the delicate balance between inflation and unemployment rates.

What Happened: In his latest podcast on Wednesday, Cowen discussed how the 10-year Treasury yield affects Bitcoin's price action.

He pointed out that Bitcoin struggled in 2023 when yields rose and only recovered once yields peaked. This suggests Bitcoin may face headwinds if yields climb further.

Cowen also warned that a significant rise in inflation or unemployment could disrupt market cycles, increasing the likelihood of a left-translated cycle—meaning Bitcoin's peak could come earlier than expected.

Looking ahead, Cowen stressed the importance of both inflation and unemployment rates remaining “well behaved” for a favorable market cycle.

He concluded, “If either of those two metrics go up a lot if there’s a big spike in the inflation rate or a big spike in the unemployment rate then the odds of a left translated cycle would go up a lot.”

This means Bitcoin's peak could come earlier than expected.

Also Read: Raoul Pal Predicts Bitcoin To Hit $250,000 To $350,000 Under One Condition

Why It Matters: Cowen noted that headline inflation came in slightly above expectations at 3.3%, continuing an upward trend since the Federal Reserve began cutting interest rates in September 2024.

While acknowledging similarities to the 1970s inflation pattern, Cowen doesn’t believe a repeat of that scenario is the most likely outcome.

He emphasized the importance of the Fed’s response, saying, “As long as the FED doesn’t cave you know to political pressures and aggressively cut interest rates more than they really need to,” a severe inflationary spiral could be avoided.

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