# 5 Things You Need To Know About Bitcoin And The Related Inflation Surge
Bitcoin (BTC) is starting the first week of 2023 on a rather uneventful note, with low volatility and muted trading activity.
Despite its lackluster performance during the holiday season, Bitcoin’s price remains stable within a narrow range, having experienced significant losses of about 65% in 2022.
For the average Bitcoin holder, the focus is on macroeconomic triggers like the actions of the United States Federal Reserve and how they impact the value of the dollar.
With Wall Street set to resume trading on Jan. 3, let’s delve into the factors influencing Bitcoin’s price movements in the near future and beyond.
## Bitcoin Traders Concerned About Potential Decline in Prices
Bitcoin holders are eager for some market volatility, but BTC remains relatively stable, as indicated by data from Cointelegraph Markets Pro and TradingView.
Despite various events like low-volume Christmas trading and quarterly and yearly candle closes, Bitcoin’s volatility reached record lows leading up to the end of the year.
Traders are cautious about Bitcoin’s future performance, with little indication of any significant shifts in market sentiment.
## Michael Burry’s Warning About Inflation
As the United States awaits the Consumer Price Index (CPI) data for December, investors are keeping an eye on key economic indicators like the Purchasing Managers’ Index (PMI) and non-farm payroll data.
Inflation is expected to decline in the short to mid-term, providing room for maneuvering for risk assets. The Federal Reserve’s stance on interest rate hikes will also play a crucial role in shaping market sentiment.
Noted investor Michael Burry believes that inflation is likely to return, cautioning that the U.S. could face recession despite current trends suggesting a decline in inflation.
## Challenges in Bitcoin Mining
Bitcoin’s upcoming difficulty adjustment on Jan. 3 indicates challenges for miners as they struggle to cope with Bitcoin’s price fluctuations.
While the competition among miners remains high, recent data shows a significant drop in the hash rate, highlighting the struggles faced by miners globally.
## Bitcoin Supply and Market Sentiment
The supply of dormant BTC has reached high levels, indicating that long-term hodlers are holding onto their assets amidst the current market conditions.
Market sentiment, as reflected in the Crypto Fear & Greed Index, shows a mixed outlook, hovering just above “extreme fear” territory, suggesting uncertainty among investors.
Despite the challenging market conditions, some industry experts remain optimistic about the long-term prospects of the crypto industry.
Please note that the opinions expressed in this article are solely those of the author and may not reflect the views of Cointelegraph.
**Image Credit:** Momentum Ronnarong / Shutterstock
