As expected, bitcoin, like the US stocks with which it now correlates, was spooked by the US inflation data.

Thursday's report showed that the consumer price index (CPI) rose to 7.5% in January, which was better than expected. With such inflation, the Fed needs to act quickly and aggressively. And the question now is whether they will raise the rate immediately by 0.5% in March.

Despite the fact that the opinions of FOMC members differ in terms of the degree of aggressiveness regarding monetary tightening, the market is forming stronger and stronger expectations. After the inflation report, there was even talk of a possible emergency rate hike without waiting for the March meeting.

Bitcoin and inflation: what's the connection?

Bitcoin, which consolidated under the level of 45,744.38, nevertheless bounced down from it, which can now return the main cryptocurrency to the area of $40,000 per coin.

The prospects for aggressive tightening may reduce interest in risky assets, including the cryptocurrency market.

However, it is worth watching the market expectations more than the facts themselves now. Moreover, there is still time before the March meeting.

During such a period, the technique works perfectly - it remains to focus on the levels, especially since they are worked out very clearly.

Holders are calm, speculators are worried

In the meantime, a new portion of network statistics was brought up with the already familiar arguments that crypto whales are now calm on the market. They are not nervous, but are buying more on drawdowns, waiting for the resumption of the growth of bitcoin.

According to a report from the popular network data provider Glassnode, the earliest investors in the main cryptocurrency with wallets that are more than ten years old do not sell their BTC.

The number of wallets that were last active more than ten years ago, that is, back in 2012 and earlier, has increased significantly. The number of bitcoins stored in them reached an all-time high of 2,386,849.127 coins.

While many old-school investors are still sitting in their bitcoins, new long-term holders are jumping on the bandwagon. The reason for this is the wider adoption of BTC, as well as the fact that many Wall Street firms and wealthy individuals, even famous billionaires such as Paul Tudor Jones, Mark Cuban, Robert Kiyosaki, and Elon Musk, have begun to consider Bitcoin as a store of value.

Long-term holders are known in the crypto community as "diamond hands": no matter what coin they hold, they hold it tight.

On the other hand, the so-called "paper hands" or investors who came into crypto to make a quick buck or are scared out of fear of missing out (FUD) continue to sell their BTC.

For example, additional data from Glassnode shows that the number of wallets holding more than 100 BTC has fallen to a five-year low of 15,650.