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Bitcoin price rises 5% to $65,000 after CPI data
Last updated: May 15, 2024 12:55 pm EDT | 2 minute read
Bitcoin (BTC) price rose more than 5% back to the $65,000 level on Wednesday, on the back of US CPI inflation data showing moderation in price pressures in April. This supports bets that the Fed will be able to ease interest rates a few times before the end of 2024.
Decent IPC reading –
US CPI (MoM – April): 0.3% versus 0.4% expected. (previous 0.4%) Core (Monthly): 0.3% vs. 0.3% expected. (previous 0.4%)
Growth stocks are like coiled springs, QT-tapers and rate cuts later this year, which will likely spark a big rally.
— Puru Saxena (@saxena_puru) May 15, 2024
The increase of Bitcoin The price accompanied a 0.9% jump to new all-time highs for the S&P 500. Meanwhile, U.S. bond yields and the U.S. dollar index sank to one-month lows.
Traders are currently the most confident that there will be at least one cut by September, about a month away. This is second ECM datawhich shows a 71% money market implied probability of at least one cut by September.
A day ago, the money market suggested that the probability of at least one cut by September was around 65%.
Bitcoin it now faces a crucial technical barrier in the form of its 50DMA at $65,166. If the price of Bitcoin were to break above this level and hit May highs at around $65,500, further upside could follow in the short term.
The next level to watch would be late April highs around $67,000. Beyond that, the next target would be a retest of the yearly highs in the $73,000 area.
Can Bitcoin price break out of its multi-month range?
Fears of a gradual increase in inflation in the first quarter of 2024 have been a major headwind for Bitcoin in recent months.
Sticky inflation in early 2024 forced markets to price in aggressive Fed rate cuts. This is likely the main reason why Bitcoin stalled after hitting new record highs near $74,000 ahead of the halving.
It has since been stuck within a consolidation range, trading mostly between $60,000 and $70,000. However, while not a turning point, the latest inflation report shows signs that the surge in inflation in the first quarter will not last.
If inflation concerns ease from here on out, the macroeconomic outlook could turn into a medium-term tailwind for Bitcoin rather than a headwind.
So, can the price of Bitcoin break out of its multi-month range? Well, in recent years, May has not been a good month for Bitcoin.
As per bitcoinmonthlyreturn.comBitcoin fell 35% in 2021, 15.5% in 2022, and 7% in 2023. According to Steno Research, Bitcoin has not performed well during the middle months of the year for the past five years.
Sell in May and start in Bitcoin? @MadsEberhardt with all the data here -> https://t.co/OQyGuqYCFr pic.twitter.com/qxyr0yZ2nN
— Andreas Steno Larsen (@Andreas Steno) May 2, 2024
Post-halving rallies typically do not begin until 4-6 months after the halving. This would suggest that there will be no major upward push until after August.
But 2024 could be different since it is an election year. Markets tend to recover ahead of elections, moving them away from normal summer bearish conditions.
Both #Bitcoin and the stock market are consolidating right around the ATH, in a presidential election year.
History has shown us that markets love to rally ahead of elections, so much so that the summer is bullish in 3 out of 4 pre-election summers.
Buy in May and go.
— Jelle (@CryptoJelleNL) May 15, 2024
Long-term Bitcoin price risks remain strongly tilted to the upside. Rate cuts, the halvingContinued government spending and demand for spot Bitcoin ETFs could push BTC above $100,000 in 2024 or 2025.
Disclaimer: Cryptocurrencies are a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.