According to Truflation, Bitcoin is closely correlated with inflation fluctuations. Whenever their inflation index sees a sharp drop, BTC tends to climb shortly after. What about the current scenario? Truflation sheds light on it.
Truflation’s analysis highlights a recurring phenomenon: whenever its inflation index experiences a sharp decline that stabilizes or reverses afterward, Bitcoin tends to see a subsequent rise. Their latest report, titled “Where Is Bitcoin Heading? A Hidden Signal in Real-Time Data,” provides evidence of this.
— Truflation (@truflation) March 27, 2025
Where is Bitcoin Headed Next? A Signal based on Truflation Real-Time Data.
Today we’re sharing one way our institutional clients have used the Truflation Edge to stay ahead of market moves.
While we can’t share their complete proprietary models behind it — the idea… pic.twitter.com/NsdLqLMPBc
According to the researchers, this dynamic is explained by the forward-looking nature of Bitcoin and its sensitivity to liquidity conditions. A strong disinflation generally leads investors to anticipate an upcoming monetary easing from the Federal Reserve. Although a sharp disinflation can raise concerns about a recession, a slowdown or pause in this trend reassures markets about the economy’s smooth landing.
This “soft landing” scenario boosts risk sentiment. Traders and investors who believe that inflation has been sufficiently controlled to delay further tightenings, or even accelerate rate cuts, often channel this optimism towards assets like Bitcoin.
Truflation’s report acknowledges that inflation expectations transmit across markets, from stocks to currencies to commodities. By anticipating these changes, some investors can position themselves before official inflation figures and central bank decisions confirm or refute the trend.
— Truflation (@truflation) March 13, 2025
Markets called it “lower than expected”. But here in the Truflation community, we knew better. It was -exactly- what we expected.
But how did we know?This video breaks it down—clear as day—showing you how we track inflation and… pic.twitter.com/tTDj1gHVaB
“Truflation does not influence Bitcoin in a vacuum. No single data source does. But inflation expectations spread across a range of markets – from stocks to commodities – especially on bond yields and currency markets,” the authors conclude.
According to them, “whenever Truflation has experienced a downward trend, followed by a pause or a reversal, BTC has then bounced shortly after.“
Here are the historical correlations:
As of the time of writing, BTC is trading at $83,709. With liquidity expected to arrive in the coming weeks, Bitcoin could also be poised to bounce back. Data suggests BTC could start regaining momentum between late April and mid-June.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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