Bitcoin rose near the 10-month high on April 12 as better-than-expected U.S. inflation data fueled optimism among investors.
The price of BTC/USD surged on Bitstamp just before Wall Street opened, following the release of Consumer Price Index (CPI) data for March.
Although the year-on-year increase fell 0.2% below expectations, it was still enough to inspire bullish sentiment among market participants.
The data showed that the all-items index increased by 5.0% for the 12 months ending in March, the smallest increase since May 2021.
However, market watchers warned of the potential for volatility in the wake of the CPI release, with some predicting significant moves that could spark liquidations on exchanges.
Despite these concerns, Bitcoin bulls remained confident in the cryptocurrency’s long-term trend.
Popular trader and analyst Rekt Capital noted that BTC/USD was continuing to build on its impressive daily close from April 11, which had taken it above a major resistance trendline.
#BTC is showing initial signs of a successful retest of the Higher High resistance into new support$BTC #Crypto #Bitcoin https://t.co/RUVy1tJwsd pic.twitter.com/UAFXa1fCCW
— Rekt Capital (@rektcapital) April 12, 2023
Alongside the rise in BTC, U.S. stock index futures also turned higher following the CPI data release, with the Nasdaq up 1.1% and the S&P 500 up 0.9%. The price of gold also rose by 1.1% to $2,042 per ounce. In contrast, bond yields and the U.S. dollar declined, with the 10-year U.S. Treasury yield decreasing by 5 basis points to 3.38%, and the U.S. dollar index down 0.6%.
Market expectations on rate hikes moved only modestly despite the improvement in CPI data, with a 65% chance of a hike taking place at the next Federal Open Market Committee (FOMC) meeting in three weeks’ time, down from 75% before the release.
Some analysts believe that the Federal Reserve may end its streak of interest rate hikes soon, possibly as early as its May 2-3 meeting.