Bitcoin Rally Sees Highs as U.S. Core Inflation Hits Three-Year Lows
Summary:
Bitcoin (BTC) surpassed $64,000 on May 15 amid a three-year low in U.S. core inflation. The surprising result from the latest Consumer Price Index fueled confidence among Bitcoin enthusiasts. Despite this, not all observers are optimistic, particularly with recent Producer Price Index figures indicating a consistent increase. Meanwhile, Bitcoin exchange order books were dominated by reactions to the Consumer Price Index. The investment and trading environment carries risks, warranting thorough research before decision-making.
On May 15, Bitcoin (BTC) surged past $64,000 as the core inflation in the United States hit a three-year low, as per data from Cointelegraph Markets Pro and TradingView which revealed BTC/USD reaching a local high of $64,700 following the commencement of Wall Street's trading session. The surprising findings from the latest U.S. Consumer Price Index (CPI), which went beyond expectations, ignited positivity among Bitcoin enthusiasts and injected a sense of optimism in the space of risky assets. The news arrived as both S&P 500 and the Nasdaq Composite Index broke their previous records.
The CPI for April was registered at 0.3%, a figure slightly lower than the anticipated 0.1%, whereas all other parameters lined up with pre-existing forecasts. Given these statistics, the core inflation saw its lowest point since 2021, thereby potentially strengthening arguments favoring interest rate reductions.
However, not everybody responded with optimism. The Kobeissi Letter, a trading guide, elucidated part of the issue, pointing towards the first drop in CPI inflation over the past three months. Yet, Producer Price Index (PPI) figures from the previous day depicted a consistent hike for the third consecutive month leading to the Federal Reserve's decision to observe before taking action. Jerome Powell, Federal Reserve Chairman, maintained a mild tone following Powell's statements, referring to the PPI data as 'mixed' rather than 'hot,' as quoted by Reuters.
In spite of this, there was minimal fluctuation in the market odds for imminent rate cuts on that day, with a mere 3.1% anticipating a cut in June and 28.3% for July, based on data from CME Group's FedWatch Tool.
The response to CPI overshadowed everything else on Bitcoin exchange order books. Tracking resource CoinGlass recorded a significant surge in price, consuming liquidity upwards, with a fresh block shaping above the highs around $65,000. Noted trader, Skew, commented on the scenario stating that immediate buyers needed to maintain momentum and recover the 200-period exponential moving average (EMA) as support on 4-hour timeframes, currently estimated to be $63,195.
Investment and trading opportunities undoubtedly bear risks, and readers are advised to do their own research before finalizing a decision.
Published At
5/15/2024 5:12:15 PM
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