Crypto market rebounds on soft CPI data

Cryptocurrency markets jumped after US CPI numbers remained flat on June 12, raising expectations for promising inflation data.

US Consumer Price Index (CPI) data was unchanged last month, down from 0.3% in April. On an annual basis (Annual) CPI also decreased from 3.4% in April to 3.3% in May, strengthening the predictions that the data will remain the same.

Annual levels of core CPI fell from 3.6% to 3.4% last month, the lowest level since April 2021. The general consensus predicted 3.5% points for this index.

Following the improving data, the total crypto market cap increased by 3% to $2.65 trillion, according to CoinGecko. Bitcoin (BTC) broke a two-day red line to break above $69,300 with a 4% gain; Ethereum (ETH) increased by approximately 3% to $ 3,639 at the time of writing.

Other digital assets among the top 10 tokens, such as BNB, Solana (SOL), XRP, Dogecoin (DOGE), and Toncoin (TON), also recorded modest gains on the day.

Top 10 digital assets rose with CPI data | Source: CoinGecko Softer inflation data could support crypto prices

A QCP Capital report suggested that crypto traders and investors are expecting cooler inflation data from the upcoming Federal Open Market Committee (FOMC) meeting.

The firm noted “aggressive buying” of June 13 calls and increased funding rates; This indicates that the market is positioned for an upward move.

“A neutral FOMC outcome could push the crypto market to test higher levels once again,” QCP Capital analysts said.

Cryptocurrencies and risk assets could see an influx of liquidity if the Fed mirrors the decisions of other top banks. Recently the European Central Bank and the Bank of Canada lowered interest rates. Following the news, the US dollar index (DXY) rose to a 30-day high, meaning more capital was available for investments.