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Bitcoin Surges on US CPI Inflation Dip | Crypto News

Bitcoin Surges on US CPI Inflation Dip | Crypto News

The price of Bitcoin is still steady since investors don’t seem to be concerned about inflation, especially in light of the most recent report of the Consumer Price Index (CPI) for the United States. The market players keenly anticipated the release of the U.S. CPI data, particularly in light of the recent U.S. PPI data, which revealed that inflation has increased beyond forecast.

Investors’ mood has been negatively impacted by inflationary pressure thus far, with expectations skyrocketing due to a possible hawkish stance by the Federal Reserve.

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The U.S. Core CPI Rises 3.6%

The recent data from the U.S. Labor Department showed that the U.S. Consumer Price Index (CPI) grew by 0.3% in April, lower than the market predictions of 0.4%. Interestingly, the CPI increased the previous month at the same pace. As expected by the market, the U.S. Consumer Price Index (CPI), a key indicator of inflation, increased by 3.4% year over year (YoY) on an unadjusted basis.

Concurrently, the Core CPI—which does not include food and energy prices—rose by 0.3% monthly, as predicted by Wall Street. The Core CPI increased 3.6% yearly after surging 3.8% the month before.

Notably, even while inflation appears to be declining, it continues to be greater than the Fed’s target range of 2%, negatively affecting investors worldwide. Nevertheless, investors are applauding the higher-than-expected numbers.

For reference, the latest U.S. PPI inflation data comes in more than the market expected. Subsequently, Chair of the Federal Reserve Jerome Powell restated the central bank’s position regarding its intention to raise interest rates.

Price Rallies for Bitcoin

Fed Chair Jerome Powell stated on Tuesday that the central bank may decide to leave interest rates unchanged for an extended length of time due to the continued high pace of inflation. Interestingly, a wave of investors has stayed away due to inflationary pressure, which has increased market volatility.

However, the fresh CPI data has brought some solace to markets, lowering expectations over a more hawkish step by the Federal Reserve. According to the CME FedWatch Tool, there is a 96.9% chance that the central bank will hold on to the current interest rate level at their upcoming June meeting.

In the meantime, the U.S. dollar index dropped 0.42% to $104.455, and the 10-year bond yield fell 2.07% to $4.354 in response to the CPI data. Nevertheless, investors are concentrating on other sectors despite the jump in inflation data that has stoked worries.

For background, during writing, the price of Bitcoin increased by 3.48% and was trading at $63,656.35, reaching a 24-hour high of $63,773.87 the previous day. The one-day trading volume of the flagship coin also rose 8.77% to $27.82 billion.

Furthermore, according to CoinGlass statistics, the Bitcoin Futures Open Interest (O.I.) increased by 1.75% over the previous four hours to 474.38K BTC, or $30.25 billion. This reflects that the investors are still moving with their risk-bet appetite after the cooling inflation data.

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