Bitcoin Price Rises as US CPI Inflation Falls
Today’s most anticipated US Consumer Price Index (CPI) data showed that inflation in the US remained unchanged at 0.3% in May, above market forecasts. Market watchers in particular have been eagerly awaiting this key inflation data for clues about the U.S. Federal Reserve’s current economic health and potential stance regarding its policy rate plans.
Let’s now look at the current US CPI inflation data in detail and see how this could affect both the Bitcoin price and the broader crypto market.
US CPI Inflation Cools Market optimism
US CPI remained unchanged at 0.3% in May, according to the latest data from the US Bureau of Labor Statistics. However, the market expected inflation to fall to 0.1% for the month. Despite the increase, annual CPI inflation decreased from 3.4% in the previous month to 3.3% in May.
Meanwhile, Core CPI data, which excludes food and energy prices, decreased to 0.2% in May from 0.3% in the previous month. Simultaneously, the Core CPI figure on an annual basis showed that inflation fell to 3.4% from 3.6% in April. Remarkably, both figures show that inflation is cooling, fueling market optimism.
Declining inflation data appears to have boosted market sentiment, especially after last week’s strong US Jobs data impacted investors’ risk-on appetite. Now, given the loosening of US CPI inflation data, the crypto market will be closely monitoring the FOMC interest rate decision scheduled for later today, followed by Fed Chairman Jerome Powell’s press conference.
Also Read: Why Are Altcoin Prices Falling and When Will They Recover?
Bitcoin Price Increases
The cooling US CPI inflation figure has boosted investor sentiment, as evidenced by the rise in the cryptocurrency market as well as the rise in Bitcoin price. Given the bullish data, the market expects the Fed to take a dovish stance on interest rate plans.
Meanwhile, earlier today, Markus Thielen of 10X Research predicted that BTC could witness an increase of over 4% if the US CPI falls to 3.3%. However, the market expects bullish momentum for the altcoin sector as well as the Bitcoin price. Especially after the CPI announcement, the US 10-year Bond Yield decreased by 2.81% to 4.278, while US Dollar Index Futures decreased by 0.97% to $104.175.
Bitcoin price, which has shown a slow performance this week, changed hands at $ 69,411.30, increasing by 3.60% today, following the inflation data. Especially in the last 24 hours, the BTC price dropped to $66,123.60. Simultaneously, Bitcoin Futures Open Interest increased by 2.29% to 523.38 thousand BTC or $36.37 billion in the last four hours, according to CoinGlass data.
On the other hand, the altcoin sector also recorded a strong recovery. Ethereum price is up about 3% today to $3,637.36, while solana price is up about 4% to $158.43.
Now the market will closely monitor the FOMC decision and the Fed Chairman’s comments later today. In addition, the US PPI inflation data to be announced tomorrow will play an important role in determining the possible future movement of the market.
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A seasoned professional with 3 years of experience in the financial market, Rupam has honed his skills as a meticulous research analyst and insightful journalist. She enjoys exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond traditional boundaries. His contributions include breaking news, examining AI-related developments, providing real-time crypto market updates, and providing insightful economic news. Rupam’s journey is marked by his passion to demystify the intricacies of finance and deliver impactful stories that will resonate with diverse audiences.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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