On May 15, Bitcoin soared past $64,000, coinciding with the announcement of lower-than-expected core inflation rates in the United States.
This significant increase in Bitcoin’s value occurred after the release of the Consumer Price Index (CPI) data, which reflected a positive outlook for risk assets like cryptocurrencies.
As a result, Bitcoin reached a local high of $64,700, according to data from Cointelegraph Markets Pro and TradingView.
The CPI report for April indicated a month-on-month increase of 0.3%, which was 0.1% below the anticipated figures.
This data suggested a decrease in core inflation to its lowest point since 2021, hinting at potential cuts in interest rates.
However, reactions to these statistics were mixed.
The Kobeissi Letter expressed caution, noting that while CPI inflation had decreased for the first time in three months, the Producer Price Index (PPI) had risen for the third consecutive month.
They highlighted that “The Fed will remain in wait and see mode,” acknowledging the complexities of the economic indicators.
Federal Reserve Chair Jerome Powell maintained a cautiously optimistic tone, despite mixed signals from recent economic reports.
“I wouldn’t call it hot, I’d call it mixed,” Powell remarked about the PPI data in a statement reported by Reuters.
Despite the positive CPI data, market expectations for immediate rate cuts remained low.
According to CME Group’s FedWatch Tool, the likelihood of a rate cut in June was just 3.1%, with a slightly higher expectation of 28.3% for July.
The cryptocurrency market reacted swiftly to these economic developments.
CoinGlass reported significant activity in Bitcoin exchanges, where prices surged, breaking past liquidity barriers and forming a new resistance level around $65,000.
This dynamic shift indicated a strong buy-in from market participants.
Skew, a prominent trader, commented on the situation, emphasizing the need for continued buying pressure to maintain Bitcoin’s momentum.
He suggested that for Bitcoin to lead the market confidently, it would need to surpass the $65,000 mark to restore market confidence.
In summary, Bitcoin’s price surge on May 15 was closely tied to the latest U.S. economic data, demonstrating the cryptocurrency’s sensitivity to global economic indicators and market sentiments.
The mixed economic data has left the market in a state of cautious anticipation regarding future Federal Reserve actions.
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