In the March 27, 2025 evaluation, titled “Where is Bitcoin headed next? A Signal hidden in Real-Time Data,” Truflation highlights a recurring phenomenon: every time its inflation index experiences a pronounced downtrend that later pauses or reverses, Bitcoin has tended to surge quickly afterward.
Where Is Bitcoin Headed Next?
Truflation’s research factors to a backdrop formed by the aftermath of COVID-19, when central banks worldwide slashed rates of interest to virtually zero and funneled liquidity into the financial system. That interval of simple cash overlapped with Bitcoin’s run to all-time highs in 2021. By 2022 and 2023, nonetheless, persistent inflation took maintain, prompting the US Federal Reserve to reverse course. Interest price hikes and quantitative tightening grew to become the first instruments for combating value pressures, with the Federal Reserve explicitly aiming to carry client value inflation right down to 2%.
According to the Truflation report, real-time inflation readings reached as little as 2% in June 2023. The official Consumer Price Index (CPI), printed by the Bureau of Labor Statistics, mirrored that sample a couple of month and a half later, bottoming out at 3% in July 2023. Yet from mid-2023 onward, Truflation’s index didn’t merely hold dropping in a straight line. Instead, it oscillated between larger and decrease bounds, demonstrating a cyclical sample of disinflation that will then stabilize or reverse course. Truflation now believes that every of those cyclical “inflection points” intently correlates with subsequent upswings in Bitcoin’s value.
The report references 4 distinct durations from September 2023 to September 2024 when Truflation’s index trended downward after which both flattened or rebounded. In every of these circumstances, Bitcoin’s value rose quickly after. Truflation suggests {that a} fifth such occasion could now be unfolding: the inflation index dropped steeply in early 2025, hitting round 1.30%—a degree not seen in a number of months—earlier than rebounding to 1.80%. This scenario is harking back to earlier disinflation troughs that, based mostly on Truflation’s information, presaged a brand new wave of Bitcoin shopping for.
“When Truflation’s disinflation trend pauses or reverses, Bitcoin tends to rally shortly after. This pattern has repeated a few times already — and if history rhymes, it may be unfolding once again soon,’” the evaluation states.
The underlying motive, Truflation explains, revolves round Bitcoin’s forward-looking nature and its sensitivity to adjustments in liquidity conditions. Strong disinflation often prompts hypothesis that the Federal Reserve could also be completed elevating charges and will quickly flip dovish. While steep and unrelenting disinflation can set off fears of recession, a slowdown or pause in that disinflation development usually reassures markets that the financial system just isn’t sliding into an financial downturn.
This “soft landing” scenario emboldens risk-on sentiment. Traders and traders who imagine that inflation has been subdued sufficient to delay further tightening—or to speed up price cuts—often channel their optimism into belongings like Bitcoin.
The report acknowledges that no single piece of knowledge, together with Truflation’s personal, holds absolute sway over an asset as complicated and broadly traded as Bitcoin. However, it emphasizes that real-time inflation expectations reverberate all through international markets, influencing equities, commodities, and international trade buying and selling, along with crypto. By anticipating shifts in these expectations, some traders could discover themselves forward of the curve when official CPI reports and central financial institution pronouncements lastly verify or contradict the evolving development.
“Truflation doesn’t influence Bitcoin in a vacuum. No single data source ever does. But inflation expectations ripple across a wide range of markets — from equities to commodities — and especially into bond yields and forex markets,” the evaluation concludes.
At press time, BTC traded at $84,461.
Featured picture created with DALL.E, chart from TradingView.com
Editorial Process for bitcoinist is centered on delivering totally researched, correct, and unbiased content material. We uphold strict sourcing requirements, and every web page undergoes diligent assessment by our staff of high know-how specialists and seasoned editors. This course of ensures the integrity, relevance, and worth of our content material for our readers.
