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Bitcoin price hikes by +5% after softer-than-expected U.S CPI report

2min Read

Bitcoin cleared a key short-term hurdle after CPI data recorded slightly slower inflation in April.

Bitcoin CPI
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  • U.S CPI data rose to 0.3%, slightly below the expected 0.4% in April.
  • Market saw some relief after April’s slow inflation reading, with BTC jumping by +5%

Risk-on markets, including Bitcoin [BTC], saw some relief after United States’ CPI data revealed that inflation didn’t get much worse in April. 

According to the U.S Bureau of Labor Statistics (BLS), CPI (Consumer Price Index) rose 0.3% in April, slightly lower than the expected 0.4%. CPI is a key data point for Fed rate decisions and tracks what consumers pay for goods and services to gauge inflation. 

In fact, the reading suggested that inflation cooled slightly in April, giving the markets a much-needed breather after a lot of muted price action.   

Bitcoin swings, eyes the short-term supply at $65K

AMBCrypto recently covered how this week’s Fed calendar and larger macro events could affect BTC price action. The lower reading from the CPI boosted risk-on markets, with BTC leading the fray. 

On the price chart, the king coin rallied by over 5% and cleared its short-term spot supply (resistance) level at $63k. At the time of writing, it was trading at a value well past $65,000. 

Source: BTC/USD, TradingView

The aforementioned move could flip BTC’s market structure to bullish on the lower timeframes (LTF), especially on the 4H chart, if the candlestick closes above it. It’s worth noting, however, that the market structure on higher timeframes remains bearish unless BTC decisively closes above $66k. 

Pseudonymous crypto-trader and analyst, Skew, shared a similar projection after the CPI data was released. After Bitcoin appreciated past $63,000, the trader noted, 

“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” 

Additionally, the trader marked $63k and $63.5k as key price levels for a downside move. 

Wait and watch

Despite the slightly lower CPI reading, the Fed could wait for a confirmation of slow inflation before cutting interest rates though. 

Since BTC’s price action is fixated on Fed rate expectations, a clear price direction can be picked after June’s Fed meeting. In the meantime, BTC could extend its choppiness within the $60K—$70K range until the next Fed rate decision. 

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Benjamin Njiri is a Crypto Analyst and Journalist at AMBCrypto who specializes in technical analysis and identifying emergent market trends. He excels at breaking down complex chart patterns and on-chain data to make them accessible and actionable for investors. His rigorous analytical approach is founded on his academic background as a Telecommunication Engineering graduate. This discipline has equipped him with an expert understanding of signal processing and data analysis, allowing him to systematically filter market noise from true trend signals with engineering precision. Armed with this unique perspective, Benjamin focuses on providing clear, data-driven insights into the digital asset landscape. His work is dedicated to demystifying the intricate world of cryptocurrencies, empowering readers to understand the forces that shape the market and to navigate it with greater confidence.
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