Bitcoin’s Bullish Dance with US CPI Data

Bitcoin price has been sensitive to changes in inflation data (Consumer Price Index (CPI)) relative to the previous month, according to a May 29 market report from 10x Research analyst Markus Thielen .

He said higher-than-expected CPI has been bearish for cryptocurrency, while lower-than-expected CPI has been bullish.

Correlations with CPI data

Additionally, spot inflows of Bitcoin ETFs closely followed the CPI data releases as they resumed or accelerated when the CPI data showed lower inflation compared to the previous month

The analysis plotted the price of BTC over the past six months against published US inflation data, noting that when the CPI was higher, the asset was bearish, and when the figure was lower expected, it was bullish.

“Traders who know how Bitcoin reacts to the CPI should be confident in trading in the opposite direction of the CPI change relative to the previous month.”

Bitcoin Changes Direction Based on CPI Higher/Lower Than Previous Month – 10x Research.

Research predicts that Bitcoin ETF inflows will likely remain strong over the next two weeks ahead of the June 12 CPI data release, which could push BTC to new all-time highs.

The pricing model projected a small decline as the consensus expected another disappointing higher inflation print for May 15. Looking ahead to the next two months, he predicts that inflation could be around a similar level, “with a downward bias soon to occur”.

“If inflation prints at 3.3% or less, bitcoin should hit a new all-time high.”

The analysis suggests that inflation is no longer a concern and will likely become a headwind for Bitcoin as the summer progresses. US inflation based on CPI data was 3.4% in April.

Also, data on the core personal consumption expenditures (PCE) price index, which is also the Federal Reserve’s preferred measure of inflation, will be released on Friday, May 31.

BTC Price Outlook

Bitcoin is currently trading up 1% on the day around $68,000. It fell to an intraday low of $67,122 but managed to recover during the Asian trading session on Thursday morning.

BTC has been relatively flat over the past fortnight, down 7.7% from its mid-March all-time high as consolidation continues.

Most altcoins are seeing bigger losses today, with markets retreating 1.3% to a total cap of $2.68.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!