Source: Zhitong Finance
Bitcoin rose with the stock market on Wednesday after April CPI showed that inflation had eased compared to March.
According to the data, the cryptocurrency's price increased by about 7% to $66,131, which is Bitcoin's best performance since March 25. The cryptocurrency broke the 50-day moving average for the first time since April 13.
Oppenheimer analyst Owen Lau said, “The CPI data was slightly lower than expected, slightly increasing the possibility of interest rate cuts. This is still an important factor influencing the price of Bitcoin.” “After ETFs and halving, the next major catalyst is interest rate cuts. Bitcoin is likely to remain range-bound and trade along with macro data points until we see a more clear path to rate cuts.”
According to data released by the US Labor Department's Bureau of Labor Statistics on Wednesday, CPI rose 0.3% month-on-month in April, which is slightly lower than the 0.4% forecast by Dow Jones. CPI was still up 3.4% from the same period last year.
21Shares analyst Leena ElDeeb said, “As the US core CPI cools down for the first time in six months, we may see a resurgence in investors' interest in risky assets such as cryptocurrencies, prompting more capital to flow into Bitcoin spot ETFs, which have been particularly calm in the past week.”
“Although interest rate cuts are still questionable, the recovery may be slow,” she added. “Generally, higher interest rates reduce the appeal of risky assets such as technology stocks and Bitcoin, as investors can reap significant benefits from safer options such as US Treasury bonds.”
ElDeeB explained that Bitcoin has a unique position as both a risk appetite and a safe haven asset, and many investors hold long-term views on crypto assets, adding that although the Federal Reserve's policy may cause Bitcoin to fluctuate in the short term, it will not fundamentally change Bitcoin's long-term trajectory.
Recently, Bitcoin has been more affected by macro factors, such as the introduction of Bitcoin ETFs and industry catalysts such as the halving of the Bitcoin price in the rearview mirror. Earlier this week, Bitcoin was also absent from the two-day meme stock boom.
Coupled with Wednesday's rise, Bitcoin has accumulated a cumulative increase of 8.92% this week, the best weekly gain since March 29, and is expected to break the six-week decline.
Since March, Bitcoin has remained between $60,000 and $70,000 — there have been several fluctuations in and out of this range, when Bitcoin rose to a record high but soon fell back. Investors and analysts have been expecting Bitcoin to remain range-bound in the coming months without a strong catalyst.
editor/tolk