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Bitcoin price outlook after US CPI data release today

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U.S. Federal Reserve urges new rules for crypto derivatives

Bitcoin fell over 2% on Wednesday as investors remained on the sidelines ahead of the release of U.S. CPI data later today.

Summary

  • Bitcoin price fell over 2% before trading sideways ahead of the U.S. CPI data release.
  • The monthly CPI reading for February is expected to come in hotter at 0.3%, with the year-over-year reading holding steady.

According to data from crypto.news, Bitcoin (BTC) fell from an intraday high of $71,612 on Tuesday to $69,936 last check on Wednesday, March 11.

Bitcoin price movement has fallen as traders braced for the US Bureau of Labor Statistics to publish the February Consumer Price Index (CPI) data at 8:30 a.m. ET.

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Economists expect the monthly CPI to rise by 0.3% in February, up from 0.2% increase seen in January, with the year-over-year reading holding steady at 2.4%. Meanwhile, Core CPI figures are estimated to come in at 0.2% on a monthly basis and 2.5% YoY. 

While inflation data has often been very pivotal for Federal Reserve officials on determining the next policy step, Bitcoin’s initial reaction following the announcement would most likely remain muted as the February CPI print would not factor in the impact of crude oil prices on inflation. 

In the wake of an aggressive attack by Iran on commercial vessels traversing the Strait of Hormuz, a vital strategic waterbody, global energy supplies were severely disrupted, causing crude oil prices to surge past the $100 mark for the first time in years as the market reacted to the sudden threat to one of the world’s most critical transit chokepoints.

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Without the inclusion of the surging oil prices in inflation that can be expected following next month’s CPI, Bitcoin price could continue to trade relatively sideways with no clear direction following the data release today.

If the CPI print instead comes out hotter than expected, it could trigger hawkish sentiment, while a cooler reading could encourage bulls to take control.

At press time, markets virtually see zero chance of a rate cut in March and minimal 25 bps reduction expectations in April, per the CME FedWatch tool.

Cryptocurrencies, including Bitcoin, have typically rallied when the odds of Fed rate cuts are high and retreated when they diminish.

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For now, $71,000-$72,000 appears to stand as the next major resistance area for Bitcoin, which bulls have struggled to penetrate. On the other hand, a drop below the $66,000-$67,000 support zone could open the door for a deeper correction.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Crypto World

Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

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Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

A Bank of Canada staff paper found that Aave V3 reported zero non-performing loans in 2024, with overcollateralization and automated liquidations helping prevent lender losses in its Ethereum lending market.

Using transaction-level data from Jan. 27, 2023, to May 6, 2025, the study found that positions were typically liquidated before collateral values fell below outstanding debt, helping contain lender losses across the sample.

But the model came with a tradeoff, the paper said. While it protected lenders from unrecovered losses, it also shifted risk onto borrowers and constrained capital efficiency compared with traditional lending systems.

According to the paper, Aave V3’s design relies on automated risk controls rather than traditional underwriting, requiring borrowers to post more collateral than they borrow and liquidating positions when they breach risk thresholds.

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Daily lending earnings, circulating supply, and borrowing volumes (USD) on Aave V3. Source: Bank of Canada

Recursive leverage fueled borrowing demand

According to the paper, Aave V3’s lending activity was not driven solely by users seeking liquidity. It found that recursive leverage accounted for over 20% of total borrowed volume and 8.2% of borrowing transactions during the sample period. 

Recursive leverage involves repeatedly borrowing against collateral, redeploying the borrowed assets as new collateral and borrowing again to amplify exposure.

Related: Aave V4 goes live on Ethereum after governance vote clears rollout

The study said the dynamic made borrowers more exposed when markets turned. According to the paper, liquidations on Aave V3 tended to occur in concentrated waves, with four assets accounting for 90% of total liquidated value. 

This includes Wrapped Ether (WETH), Wrapped Staked Ether (wstETH), Wrapped Bitcoin (WBTC) and Wrapped eETH (weETH).

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The paper estimated that borrower losses during major liquidation events could be significant. It said liquidation fees typically ranged from 5% to 10% of liquidated value, while missed gains from subsequent price recoveries pushed combined losses to about 10% to 30% in some cases. 

The staff paper suggested that while the design for Aave V3 helped prevent unrecovered bad debt in the sample, it did so by exposing borrowers to abrupt losses when collateral prices fell sharply. 

Cointelegraph reached out to Aave for comment but did not receive a response before publication.

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