Bitcoin climbed to $69,190 after the latest U.S. inflation report came in softer than expected, setting off more than $365 million in liquidations across the crypto derivatives market. BTC short liquidations alone reached $183 million. The move took Bitcoin from around $66,000 to above $69,000 within hours, a daily gain of roughly 4.8%.
January CPI came in below forecasts
Data released by the U.S. Bureau of Labor Statistics showed headline CPI rose 2.4% year over year in January, below the market estimate of 2.5%. Monthly CPI increased 0.2%, also under the expected 0.3%. Core CPI, which excludes food and energy, rose 2.5% from a year earlier, its lowest level since March 2021, while the monthly reading came in at 0.3%.
This was the mildest inflation print since May 2025 and marked a clear pullback from December’s 2.7%. Gasoline prices were down 7.5% year over year, making them a major factor behind the softer headline reading. Food and housing costs, though, still rose faster than headline CPI, leaving everyday inflation pressure far from gone.
Short covering pushed BTC sharply higher
The inflation surprise quickly fed expectations that the Federal Reserve could begin cutting rates as early as March. Bitcoin reacted first. The price surge forced a wave of short positions to close, and the source noted that the $69,000 to $74,000 range contains a dense cluster of short liquidation levels. If BTC moves deeper into that band, more forced covering could follow.
That said, the rebound has not erased doubts about the broader trend. According to CryptoQuant data cited in the source, Bitcoin recently went through one of the three to five largest realized loss events in its history. That points to heavy capitulation from investors who had already exited at lower prices.
ETH and SOL outperformed, while stocks faded into the close
Other major cryptocurrencies posted even larger 24-hour gains. Bitcoin traded near $69,000 with a gain of about 5%. Ether rose to roughly $2,054, up about 7%, while Solana reached around $85, up about 10%. Even so, the medium-term picture remained weak: SOL was still down about 18% over the past week, and ETH was down more than 20% year over year.
U.S. equities also rallied after the CPI release before losing momentum late in the session. The S&P 500 closed at 6,836, up 0.05%. The Nasdaq finished at 22,546, down 0.22%. The Dow closed at 49,500, up 0.10%. The weaker finish suggested that concerns tied to earnings and technology valuations were still capping risk appetite.
Fear index stayed pinned at 9
Even with Bitcoin rebounding close to 5%, sentiment did not recover. The crypto fear and greed index stayed at 9 for a second straight day, holding in the “extreme fear” zone. The source added that the index had dropped to an all-time low of 5 on Feb. 6 before edging back up.
Past market stress episodes showed similar readings near major lows. During the Terra/Luna collapse in June 2022, the index fell to 6. During the FTX collapse in November 2022, it dropped to 12. The current reading does not confirm a bottom, but the historical comparison suggests the market may be trading near a high-pain area, with any base-building process still likely to take weeks or months.
Rate-cut bets rose, but ETF outflows remained a headwind
Following the CPI release, expectations for a March rate cut increased, according to CME FedWatch data cited in the source. That shift matters for crypto because lower-rate expectations tend to support risk assets in the short term.
Still, key structural pressures remained in place. As of early February, spot Bitcoin ETFs had seen net outflows of about $690 million. That suggests institutional money had not yet moved decisively from defense back into active allocation. The source also pointed to still-open hedging positions in derivatives markets and uncertainty around Trump tariff policy as risks that could offset the benefit of softer inflation.