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Bitcoin and Altcoins Surge as U.S. CPI Remains Flat in May

by BSC News

June 12, 2024

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Core CPI, excluding food and energy prices, also cooled to 0.2% in May from 0.3% in April, with annual figures dropping to 3.4% from 3.6%.

The U.S. Consumer Price Index (CPI) for May remained unchanged, contrary to economist forecasts predicting a 0.1% rise. This marks a decline from the 0.3% increase recorded in April. Year-over-year, the CPI rose by 3.3%, slightly lower than the expected 3.4%.

Similarly, the Core CPI, which excludes volatile food and energy prices, cooled to 0.2% in May from 0.3% in April. On an annual basis, the Core CPI dropped to 3.4% from 3.6% in the previous month. These figures indicate a significant cooling of inflation, which has generated optimism in financial markets.

 

The U.S. Federal Reserve's upcoming meeting later today will be pivotal, as it decides whether to maintain or reduce current interest rates. Earlier in the year, market expectations were for multiple rate cuts in 2024. However, these expectations have shifted, with the first-rate cut now anticipated in September, according to the CME FedWatch Tool.

 

The unexpected CPI figures have positively impacted market sentiment. Following last week’s strong U.S. job data, investor risk appetite has increased. 

Bitcoin and Cryptocurrency Market Surge

The cryptocurrency market reacted quickly to the CPI announcement. Prior to the release, Bitcoin had slumped to $66,000, with investors pulling $200 million out of ETFs in anticipation of the CPI announcement and the subsequent Federal Open Market Committee (FOMC) meeting. 

 

However, the CPI data release spurred a rapid recovery in Bitcoin's price. Within minutes, Bitcoin surged past $69,000, marking a significant rebound from its earlier low.

 

Additionally, Bitcoin Futures Open Interest rose by 2.29%, reaching 523.38K BTC or $36.37 billion, as per CoinGlass data.

 

The positive sentiment extended beyond Bitcoin, with altcoins experiencing notable recoveries. Ethereum's price rose nearly 3%, reaching $3,635 while Solana saw an increase of about 5%, trading at $160. 

 

The CPI data also led to 6% and 4% gains for notable memecoins such as DOGE and SHIBA..

Disclaimer

Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article

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