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Bitcoin’s Price Has Risen After April’s Low Inflation Reading

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Nicolas Economou | Nurphoto | Getty Images

(CTN News) – Bitcoin and equity prices both increased on Wednesday following the release of the consumer price index for April, which showed a decrease in inflation.

The cryptocurrency’s price rose by more than five percent to $64,910.57 at the close of trading, as reported by Coin Metrics. The cryptocurrency is currently on course to achieve its best day since March 25 because of this. For the first time since April 13, Bitcoin temporarily traded above its 50-day moving average; however, it has since fallen below that threshold.

Today, Bitcoin is trading below that mark.

“Slightly below-anticipated CPI data increased the likelihood of a reduction in interest rates, which continues to exert a substantial impact on the price of bitcoin,” Owen Lau, an analyst at Oppenheimer. “A rate cut is the next major catalyst following ETFs and halving.”

It is quite probable that Bitcoin will trade in a manner that is confined by a range in conjunction with macro data points until a more distinct route for a rate decrease becomes apparent.

According to statistics that was provided on Wednesday by the Bureau of Labor Statistics of the Department of Labor, the consumer price index, which is a broad indicator of the cost of goods and services at the register, grew by 0.3% from March. That was a little bit lower than the projection of 0.4% that was provided by Dow Jones. Regarding the previous year, there has been a continuation of the upward trend of 3.4% in consumer prices.

Leena ElDeeb, an analyst at 21Shares, made the observation, “With the U.S. core CPI cooling for the first time in six months, investors’ appetite for risky assets such as cryptocurrencies may be reviving, sparking more flows into bitcoin spot ETFs, which have been exceptionally quiet over the past week.”

A further statement that she made was that “a recovery could be gradual,” despite the fact that the rate reduction are still unknown. In general, when interest rates are high, the attraction of hazardous assets like technology stocks and bitcoin is diminished.

This is because investors are able to get big returns from alternatives that are more secure, such as U.S. Treasury securities.

Bitcoin holds a unique position in the market as an asset that can be considered both risk-on and risk-off, and a significant number of investors continue to maintain a long-term perspective on the cryptocurrency asset.

ElDeeb elaborated, noting that although volatility in the near term may be created by policies implemented by the Federal Reserve, this does not fundamentally change the direction of bitcoin in the long term.

In recent years, macro factors have exerted a bigger influence on bitcoin. This has been made possible by industry triggers such as the introduction of bitcoin exchange-traded funds and the halving that has occurred in the past. In the beginning of this week, Bitcoin was able to withstand a recurrence of the meme stock mania that lasted for two days.

Bitcoin’s weekly increase of 7% is the best since March 29th,

When it was at its lowest point. The cryptocurrency is on course to reverse a six-week slide, as seen by the rise that occurred on Wednesday.

Since March, when it skyrocketed to unparalleled levels before rapidly retreating, Bitcoin has remained within the range of $60,000 to $70,000 (with a few oscillations above and below that interval).

This is with the exception of a few swings that have occurred outside of that interval. In the absence of strong catalysts, investors and analysts have projected that the cryptocurrency will continue to trade within its range for a number of months beyond the current time frame.


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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