Bitcoin (BTC) achieved a record high of US$66,400 on Wednesday, following the release of the April Consumer Price Index (CPI) data, which indicated a decrease in inflationary pressures.
According to the US Bureau of Labor Statistics, April’s CPI showed a 3.4% increase compared to the previous year, down from the 3.5% seen in March. More importantly, the core CPI, which excludes volatile food and energy prices, also decreased, dropping from 3.8% to 3.6%. These figures were in line with market expectations and further reinforced the perception of more effective inflation control.
The decrease in inflationary pressures has tempered expectations that the Federal Reserve will maintain a more aggressive stance for an extended period. “The reading provided some relief after previous CPI reports suggested more persistent inflation, which dampened expectations of an early interest rate cut from the Federal Reserve,” as previously mentioned.
With inflation appearing to be easing, market optimism is evident, with a 75% probability of an interest rate cut as early as September, according to the CME FedWatch tool.
The positive outlook has not only affected Bitcoin but also the entire cryptocurrency market. The flagship cryptocurrency has experienced an almost 7% increase in value in the past 24 hours, briefly surpassing the $63,000 mark immediately after the inflation data was released.
The overall cryptocurrency market has also reflected this enthusiasm, with a nearly 6% increase in its capitalization, reaching approximately $2.5 trillion. Prominent altcoins like Ethereum (ETH) and Solana (SOL) have followed this upward trend, with ETH surpassing $3,000, up 4%, and SOL advancing 8% and breaking the $150 barrier. Other altcoins such as FTM, SEI, IMX, TAO, and BEAM have seen gains of over 15% in a single day.
According to a trader’s analysis, the Bitcoin price has shown promising behavior after falling below the minimum range. The expert stated, “After deviating below the range low, the price bounced, touched resistance, and is now returning to an interesting support zone. This could be forming the first higher low.”
The trader emphasized the strong demand between $59,000 and $61,000, with mostly optimistic indicators, suggesting a potential recovery. He mentioned that “if BTC breaks the $65,000 resistance, I would be looking for between $68,000 and $69,000 as a first target and $74,000 to $75,000 as a second target.”
However, the analyst cautioned against the possibility of the bullish scenario being invalidated, stating, “The bullish invalidation would be a bearish price action in the previous liquidity zone.” Therefore, it is crucial to closely monitor market behavior, especially in the identified resistance and support zones.
Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries the risk of financial loss.
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