The BTC exchange rate received a strong boost thanks to the published US inflation data, and Bitcoin bulls are now watching for a breakout of the uptrend.
Directly following the publication of the March consumer price index (CPI) data, strong volatility appeared in the Bitcoin exchange rate.
The CPI indicator in March was roughly in line with expectations, in contrast to expectations, it was only 0.2% lower year-on-year.
“The index of all goods increased by 5.0 percent in the 12 months ending in March. This was the smallest price increase in a 12-month timeframe since the period ending May 2021.” – confirmed by the US Bureau of Labor Statistics announcement.
However, this was enough to cause serious confidence in the crypto markets before the opening of Wall Street, which was quickly reflected in the exchange rate. This also means further upside potential in line with equity markets.
This was what Tedtalksmacro called a “major inflationary imprint” for crypto bulls on Twitter.
However, because of the CPI, which is known as the classic catalyst of “false” price correction, the market participants cautioned.
Popular analytics platform Skew predicted that “the market will hunt for liquidity as it does any day the CPI comes out”. This can generate serious liquidity in crypto markets. “Overall, the CPI says that inflation is slowing, but the core of the price index is still high.” he commented on Twitter in a follow-up post regarding expected US macroeconomic policy.
“There will probably be another spike. The May data should confirm the rate hike shock so that the FED actually considers pausing the rate hike cycle.”
For the time being, market expectations regarding the interest rate hike have only changed modestly, despite the improvement in consumer price index data.
According to CME Group’s FedWatch Tool, there is still a 65% chance that the Fed’s FOMC will raise interest rates once more at its next meeting in three weeks. Before the CPI data came out, they saw a 75% chance of this.
Bitcoin bulls are bullish
The latest BTC price movement, meanwhile, has further reinforced longer-term expectations that Bitcoin has broken the bear market.
Popular trader and analyst Rekt Capital noted that BTC/USD has continued to rally nicely since April 11 and managed to hold above a major resistance trendline.
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