Bitcoin experienced a surge to $69,499 following the release of the U.S. Consumer Price Index (CPI) data for May, which showed a decrease to 3.3%, sparking optimism in the market for potential rate cuts and boosting the overall crypto market sentiment.
The unexpected decline in the unadjusted CPI annual rate for May, which came in at 3.3% compared to the anticipated 3.4%, led to significant movements in the crypto market, particularly driven by Bitcoin. The unadjusted core CPI annual rate also dropped to 3.4%, lower than the expected 3.5% and the previous month’s 3.6%, marking the lowest core CPI annual rate since April 2021.
Following the CPI data release, Bitcoin saw a notable price increase, reaching $69,499.12, representing a 3.86% surge in the last 24 hours. This rise was fueled by aggressive buying of June 13 calls and a substantial increase in the funding rate, indicating market expectations of a positive outcome. Analysts noted that an inline CPI print and a neutral Federal Open Market Committee (FOMC) outcome could push the crypto market to retest recent highs.
Analyst Ali Martinez pointed out Bitcoin’s historical trend of rebounding after FOMC meetings, with recent chart analysis showing a climb in price from around $68,020 to a peak of $69,276.93 before a minor pullback. Lower-than-expected CPI data led to significant drops in the Dollar and Treasury yields, further boosting the bullish sentiment for Bitcoin and other cryptocurrencies, as observed by Michaël van de Poppe.
The market is anticipating a 25 basis point interest rate cut by the Federal Reserve in November, with a 100% probability, following the unexpected decline in gasoline prices contributing to the CPI decrease. However, the possibility of a rate cut in September remains uncertain, according to Colin Wu. Despite a recent retracement where Bitcoin briefly dropped to a daily low of $66,741, historical patterns and current market conditions suggest continued bullish trends, with many analysts viewing dips as buying opportunities.
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