Key Points
- Bitcoin (BTC) surpasses $64,000 as U.S. core inflation drops to a three-year low.
- The Consumer Price Index (CPI) outperforms expectations, providing a boost to Bitcoin bulls.
Bitcoin (BTC) value exceeded $64,000 on May 15, coinciding with a drop in the U.S. core inflation to its lowest in three years.
Data from market monitoring resources showed a local peak of $64,700 for BTC/USD following the start of Wall Street trading.
Bitcoin Bolstered by CPI Results
The latest U.S. Consumer Price Index (CPI) results exceeded expectations, giving a lift to Bitcoin bulls. This was a positive development for risk assets, with both the S&P 500 and Nasdaq Composite Index reaching record highs.
For April, the month-on-month CPI was reported at 0.3%, 0.1% below expectations, while other figures matched predictions.
As a result, core inflation dropped to its lowest since 2021, potentially strengthening arguments for interest rate cuts.
Market Reactions
However, not all reactions were positive. Some market observers noted this was the first drop in CPI inflation in the past three months, while the Producer Price Index (PPI) data showed a third consecutive monthly increase.
Despite the mixed data, Jerome Powell, Chair of the Federal Reserve, maintained a dovish tone. He described the PPI data as “mixed” rather than “hot”.
Despite this, market odds for near-term rate cuts remained mostly unchanged, with a mere 3.1% predicting a June cut and 28.3% for July.
Turning to Bitcoin, the exchange order books showed significant changes in response to the CPI data.
Data showed price rising through liquidity to the upside, with a new block forming above the highs around $65,000.
According to popular traders, spot buyers need to maintain pressure and reclaim the 200-period exponential moving average (EMA) as support on 4-hour timeframes, currently at $63,195.
To regain market confidence, Bitcoin would need to flip $65K.
