Bitcoin (BTC) bulls cheered today as the cryptocurrency surged past $64,000 following a key US economic report. The positive momentum stemmed from lower-than-expected inflation data, raising hopes for a shift in Federal Reserve monetary policy.
The US Consumer Price Index (CPI), a key inflation gauge, revealed a surprise slowdown for April. The core inflation rate, which excludes volatile food and energy prices, hit a three-year low, sparking optimism across risk assets. Both the S&P 500 and Nasdaq stock indexes reached record highs on the news.
Source: CoinMarketCap
Bitcoin mirrored the positive sentiment, reaching local highs of $64,700 after the Wall Street opening bell. Analysts attributed the rally to increased speculation of the Federal Reserve potentially cutting interest rates in the near future. Lower interest rates are generally seen as positive for riskier assets like Bitcoin.
However, some market participants remain cautious. The Kobeissi Letter, a popular trading commentary platform, noted that while CPI data pointed to easing inflation, Producer Price Index (PPI) figures released the prior day showed a different picture. This potential disconnect could keep the Fed in a “wait and see” mode regarding rate cuts.
Federal Reserve Chair Jerome Powell echoed this cautious sentiment when questioned about the PPI data. While acknowledging the data wasn’t “hot,” he refrained from calling it a definitive sign for looser monetary policy.
