Bitcoin Price Increases +5% After US CPI Report
US CPI data rose to 0.3%, slightly below expectations in April. The market saw some relief after April’s slow inflation reading, with BTC jumping +5%
Venture markets including Bitcoin [BTC] saw some relief after US CPI data revealed that inflation did not worsen much in April.
According to the US Bureau of Labor Statistics (BLS), CPI (Consumer Price Index) rose 0.3% in April, compared to 0.4% in March. The CPI is a key input to the Fed’s rate decisions and tracks what consumers pay for goods and services to measure inflation.
Based on available data, inflation appears to have cooled slightly in April, giving markets some needed cushion after subdued price activity.
Bitcoin Sees Short-Term Bid of $65,000
A media outlet recently covered how this week’s Fed calendar and larger macroeconomic events could impact BTC price action. The lower CPI reading fueled risk in the markets, with BTC leading the fight.
On the TradingView price chart, BTC is up over 5% and broke its short-term spot resistance level at $63k. Until now, BTC was trading at a value well above $65,000.
Such a move could make the BTC market structure bullish on the lower time frames (LTF), especially on the 4-hour chart, if the candle closes above it. However, the market structure on higher timeframes remains bearish unless BTC closes decisively above $66,000.
Cryptocurrency analyst and trader Skew shared a similar projection after the CPI data was released. After Bitcoin appreciated beyond $63,000, the trader noted the following:
“Spot supply around $65K now. Thin spot books so spot taker flow will be vital in order to trend with bullish pricing so far in risk assets.”
Furthermore, the trader marked $63,000 and $63,500 as key price levels for a downward move.
What’s Next
The Federal Reserve could wait for confirmation of sluggish inflation before cutting interest rates, despite the slightly lower CPI reading.
Since BTC price action is set based on Fed rate expectations, a clear price direction can be seen after the June Fed meeting. Meanwhile, BTC could extend its instability within the $60,000 to $70,000 range until the next Fed rate decision.
With the economy continuing to grow, the idea of any imminent rate cut by the Central Bank no longer has any place. Ahead of Wednesday’s CPI report, the odds of a summer rate cut by the Federal Reserve were low and traders had priced in only a 50% chance of a September cut, according to the CME FedWatch tool.
Today’s moderately good news on inflation so far seems to have traders increasing their bets on easier monetary regulation.
BTC Forecast
The price of Bitcoin (BTC) rose more than 1% in the minutes following the Wednesday morning report, reaching $63,500.
According to CryptoPredictions, the BTC Price is forecast today to be in the $56,609.085 – $83,248.655 price range, while it is predicted to end today at $66,598,924.
By Leonardo Perez