The release of the latest U.S. Consumer Price Index (CPI) report has led to a bearish trend in the cryptocurrency market, with Bitcoin experiencing a notable decline.

Unexpected CPI Data Impacts Federal Rates

Recent CPI data, which came in above market expectations, has shown a decrease in the annual inflation rate to 3.1% from the previous 3.4%, against a forecasted 2.9%. Despite this, the Federal Open Market Committee (FOMC) has chosen to maintain the interest rates at their current levels of 5.25% to 5.50%.

Market Outlook Ahead of FOMC Meeting

With the next FOMC meeting scheduled for March 20, market analysts from the CME Group anticipate a high likelihood of 89.5% that interest rates will remain unchanged, leaving a small window of 10.5% for a potential decrease in rates.

Crypto Market Reacts to Economic Indicators

The crypto market has shown a bearish response to the CPI data and the FOMC’s decision to hold interest rates steady. This sentiment is reflected in the global crypto market capitalization, which has seen a 0.3% decrease in the last 24 hours, bringing it to a total of $1.95 trillion.

Bitcoin’s Performance in the Wake of CPI Report

Bitcoin itself has not been immune to the market’s downturn, with a 0.8% drop in its value over the past day, trading at $49,600. The daily trading volume of Bitcoin has also seen a 13% decline, indicating a bearish outlook among investors.

Open Interest and Funding Rates Indicate Market Sentiment

Data from Santiment reveals a decrease in Bitcoin’s total open interest (OI), from $9.9 billion to $9.4 billion, which translates to a $500 million drop. Additionally, the total funding rate across exchanges has reduced, further demonstrating a cautious stance from traders.

Optimism Amidst Bearish Trends

Despite the recent dip, Bitcoin options markets for contracts expiring on March 29 still show optimism, with strike prices set at impressive highs of $60,000, $65,000, and even $75,000, hinting at a belief in Bitcoin’s potential to reach new peaks.