Bitcoin Price Jumps as Inflation Eases: On Pace for Best Day Since March
BTC Jumps as Inflation Eases
BTC jumped with stocks on Wednesday after the April consumer price index showed inflation eased from the previous month. The price of the cryptocurrency was last higher by more than 5% at $64,910.57, according to Coin Metrics, and on pace for its best day since March 25.
Rate Cut Speculation Boosts Bitcoin
“The slightly lighter than expected CPI number modestly increased the chance of a rate cut, which is still a strong influencer to BTC price,” said Owen Lau, an analyst at Oppenheimer. “After the ETFs and halving, the next major catalyst is a rate cut. Bitcoin is likely to remain rangebound and trade along with macro data points, until we see a clearer path for rate cut.”
Investor Appetite for Risk-On Assets
With the U.S. core CPI cooling down for the first time in six months, investors’ appetite for risk-on assets like crypto could be on the rise, instigating more flows into BTC spot ETFs. However, the recovery might be slow as the question of rate cuts still looms.
BTC Holds Unique Position as Both Risk-On and Risk-Off Asset
Bitcoin holds a unique position as both a risk-on and a risk-off asset, with many investors holding a long-term view of the crypto asset. While Fed policies may induce bitcoin volatility in the short term, it doesn’t fundamentally change bitcoin’s long-term trajectory.
Bitcoin’s Recent Performance and Outlook
Lately, BTC has been more heavily influenced by macro factors, with industry catalysts like the launch of BTC ETFs and the halving in the rearview mirror. With Wednesday’s gain, bitcoin is now up 7% for the week – its best week since March 29 – and on pace to break a six-week slide.
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