As an experienced financial analyst, I believe the recent advancement of Bitcoin (BTC) above $64,000 and its subsequent local highs can be attributed to the unexpectedly low United States core inflation rate. The CPI print came in below expectations for April, resulting in a decrease from previous levels and potentially bolstering the case for interest rate cuts.
Bitcoin (BTC) passed $64,000 on May 15 as United States core inflation hit three-year lows.
Bitcoin advances as CPI beats expectations
As a researcher analyzing market data, I’ve observed some intriguing trends using the resources of CryptoMoon Markets Pro and TradingView. Notably, the price of Bitcoin against the US Dollar (BTC/USD) peaked at $64,700 following the Wall Street open.
The recent US Consumer Price Index (CPI) report surpassed forecasts, leading to optimism among Bitcoin investors and a rise in value for this cryptocurrency. Concurrently, the S&P 500 and Nasdaq Composite Index also reached new record highs, benefiting risk assets overall.
The Consumer Price Index (CPI) increased by 0.3% from the previous month, falling short of the anticipated 0.4% growth in April. However, other data aligned with the forecasts.
By taking this action, core inflation dropped to its least elevated point since the beginning of 2021 – which could strengthen the argument for reducing interest rates.
Reacting, however, not everyone was so optimistic.
In their thread on platform X, The Kobeissi Letter stated, “This is the initial drop in consumer price index (CPI) inflation over the past three months. Yet, yesterday’s producer price index (PPI) inflation figures indicated a third consecutive monthly rise.”
“The Fed will remain in wait and see mode.”
As a crypto investor, I closely follow economic data releases, and the Producer Price Index (PPI) numbers from the previous day piqued my interest. However, despite these figures, Jerome Powell, the Chair of the Federal Reserve, kept a dovish tone during his latest speaking engagement.
He expressed that the PPI data wasn’t exactly hot, but rather a mix of different temperatures. (Or) He qualified the description of the PPI data being hot, instead preferring to label it as having a blend of temperatures.
The chances of the Federal Reserve implementing interest rate reductions in the coming months remained largely unchanged according to data from CME Group’s FedWatch Tool. Specifically, only 3.1% of investors predicted a June cut, while 28.3% anticipated a July reduction.
BTC price support reclaim in focus
As a researcher studying the cryptocurrency market, I’ve observed noticeable changes in Bitcoin’s exchange order books following the Consumer Price Index (CPI) announcement.
As a crypto investor, I closely monitor data from resources like CoinGlass. Recently, I’ve noticed the price relentlessly devouring available liquidity and forging ahead, reaching new heights around $65,000, forming a fresh block above previous highs.
In the existing market context, well-known trader Skew advised that investors purchasing spot Bitcoin should work to regain control and elevate the 200-period exponential moving average (EMA) as a foundation on 4-hour charts, which now stands at $63,195.
As a crypto investor, I believe that Bitcoin’s price showing some resilience currently is ideal. However, in my opinion, we would need to see a significant surge above the $65,000 mark for the market confidence to fully return.
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2024-05-15 17:21