In the analysis from March 27, 2025, titled “Where is Bitcoin headed next? A Signal hidden in Real-Time Data,” Truflation emphasizes an ongoing trend: every time its inflation index shows a marked downtrend that subsequently levels off or reverses, Bitcoin has typically seen a significant rise shortly thereafter.
What Lies Ahead for Bitcoin?
Truflation’s findings reflect a landscape shaped by the COVID-19 aftermath, during which central banks around the globe drastically reduced interest rates to near-zero and injected liquidity into the economy. This era of easy money coincided with Bitcoin reaching record highs in 2021. However, by 2022 and 2023, stubborn inflation took center stage, leading the US Federal Reserve to change its strategy. Interest rate hikes and quantitative tightening became the focal measures for combating price pressures, with the Federal Reserve explicitly targeting a reduction in consumer price inflation to 2%.
The Truflation report notes that real-time inflation metrics fell as low as 2% in June 2023. The official Consumer Price Index (CPI), released by the Bureau of Labor Statistics, mirrored this trend approximately six weeks later, hitting a low of 3% in July 2023. Yet from mid-2023 onward, Truflation’s index did not simply decline linearly. It instead fluctuated within higher and lower limits, revealing a cyclical disinflation pattern that would then stabilize or reverse. Truflation now posits that each of these cyclical “inflection points” closely aligns with subsequent increases in Bitcoin’s value.
The report identifies four distinct intervals from September 2023 to September 2024 during which Truflation’s index declined and then either stabilized or rebounded. In every instance, Bitcoin’s price increased shortly afterward. Truflation suggests that a fifth occurrence may be in progress: the inflation index plummeted in early 2025, reaching approximately 1.30%—a level not observed in several months—before rebounding to 1.80%. This scenario closely resembles prior disinflation lows that, according to Truflation’s data, heralded a fresh wave of Bitcoin buying.
“When Truflation’s disinflation trend pauses or reverses, Bitcoin tends to rally shortly after. This pattern has recurred several times already — and if historical trends hold true, it may be happening again soon,” the analysis declares.
The fundamental reasoning, as per Truflation, centers on Bitcoin’s forward-looking nature and its responsiveness to shifts in liquidity conditions. A marked disinflation often triggers speculation that the Federal Reserve may have concluded its rate increases and could soon adopt a more dovish stance. While rapid and relentless disinflation may fuel recession fears, a slowdown or halt in that trend usually reassures markets that the economy isn’t veering towards a downturn.
This “soft landing” scenario fosters a risk-on attitude. Traders and investors who perceive that inflation has been sufficiently subdued to postpone any further tightening—or even to accelerate rate cuts—often direct their optimism towards assets like Bitcoin.
The report acknowledges that no single data point, including Truflation’s own metrics, exerts absolute influence over an asset as intricate and widely traded as Bitcoin. However, it underscores that real-time inflation expectations resonate across global markets, impacting equities, commodities, and foreign exchange trading, along with cryptocurrencies. By anticipating shifts in these expectations, some investors may find themselves ahead of the game when official CPI reports and central bank announcements eventually confirm or challenge the emerging trend.
“Truflation doesn’t dictate Bitcoin’s movements in isolation. No singular data source ever does. But inflation expectations ripple across a broad spectrum of markets — from equities to commodities — and particularly into bond yields and forex transactions,” the analysis concludes.
At the time of writing, BTC is priced at $84,461.
Disclaimer: This information is provided for informational purposes only. Past performance is not indicative of future results.
