Bitcoin (BTC) fell 1.8% on Feb. 12 after US inflation data came in higher than expected, pushing the cryptocurrency to its lowest level in nine days. The price correction accelerated as the US reported a 3% year-over-year increase in the Consumer Price Index (CPI) for January, leading to a retest of the $94,200 support level.
Traders are questioning whether Bitcoin can still reach the highly anticipated $100,000 mark, given growing concerns over global economic growth and the potential impact of recent policy measures introduced by the Trump administration, including tariffs.
S&P 500 index futures (left) vs. Bitcoin/USD. Source: TradingView / Cointelegraph
The stock market also reacted negatively to the inflation report, with the S&P 500 futures erasing gains from the previous eight sessions. This suggests that Bitcoin’s recent downturn is largely driven by broader market sentiment and fears of contagion, reinforcing the perception of an ongoing correlation between equities and digital assets.
Short-term traders reduced Bitcoin exposure due to its 40-day correlation of 65% with the S&P 500. However, from a broader perspective, higher inflation typically benefits scarce assets like Bitcoin while it pressures publicly traded companies to raise prices to maintain profit margins.
SoftBank loss and BTC mining profitability add to Bitcoin holders’ concerns
Bitcoin investors face additional pressure from SoftBank, the Japanese financial conglomerate known for its venture capital investments in technology. The firm reported a $2.4 billion loss in Q4 after two consecutive quarters of profits. SoftBank’s shares, listed on the Tokyo Stock Exchange, last closed with a market capitalization of $93.7 billion.
Most investors still view Bitcoin as a risk-on asset, meaning losses in SoftBank’s portfolio—particularly in Chinese e-commerce and electric vehicle makers—prompt traders to move into cash.
US 10-year note yield (left) vs. US dollar DXY index. Source: Tradingview / Cointelegraph
This risk aversion was reflected in the strengthening US dollar, as the DXY index rose from 107.90 to 108.40 on Feb. 11. Similarly, US 10-year Treasury yields increased from 4.54% to 4.65%, reinforcing a shift toward safer assets.
Adding to Bitcoin’s bearish sentiment was a decline in miners’ profitability, measured by the Hashrate Price Index. Reduced demand for block space has pressured transaction fees, raising concerns that miners facing high energy costs may be forced to shut down operations.
Bitcoin Hashrate Index, PH/second. Source: HashrateIndex
The Bitcoin Hashrate Index measures the expected revenue from 1 terahash per second (TH/s) of hashing power per day, incorporating network difficulty, Bitcoin price, block rewards, and transaction fees. To smooth out fluctuations, the index applies a 24-hour simple moving average.
Related: Bitcoin price could reach $1.5M by 2030 — Cathie Wood
A decline in miner revenues puts pressure on those with higher energy costs or less efficient hardware, such as older-generation ASICs, potentially forcing them to shut down operations if the Hashrate Index drops. Some investors argue that a lower hashrate weakens network security, increasing the risk of a negative cycle where declining prices push more miners out of the market, further reducing security.
While this theory has not materialized in previous cycles, the long-term sustainability of Bitcoin’s security model remains a subject of debate. The upcoming Bitcoin halving will reduce mining incentives, making network security increasingly dependent on transaction fee revenue and demand for block space.
Macroeconomic factors, venture capital underperformance, and miner profitability concerns have weighed on sentiment, but these developments alone do not justify Bitcoin trading below $95,000. The cryptocurrency remains positioned as a risk-off investment in the view of BlackRock, the world’s largest asset manager.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
