Bitcoin Surges 5% to $65K Amid CPI Data: Eyes Breakout from Long-Term Range
Bitcoin spikes 5% to $65,000 post US CPI data, hinting at a potential breakout from its prolonged consolidation. With inflation fears easing, market sentiment leans towards BTC upside, despite historical May trends.
In a notable uptick, Bitcoin value soared by over 5% to reach $65,000 following the release of US Consumer Price Index (CPI) data. This surge aligns with growing optimism fueled by moderating inflation pressures, suggesting a possible relaxation in Fed interest rates by 2024-end. The S&P 500 also recorded a significant 0.9% surge to attain fresh all-time highs. Conversely, US bond yields and the US Dollar Index slumped to their lowest levels in a month.
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Market analysis indicates a prevailing sentiment towards potential interest rate cuts, with CME data reflecting a 71% probability of at least one cut by September, up from 65% a day prior. BTC now faces a pivotal obstacle at its 50-day moving average, currently at $65,166.
A breach above this level, coupled with surpassing May highs around $65,500, could usher in further short-term gains, with targets extending to late-April highs near $67,000 and possibly beyond to the $73,000 region.
Bitcoin performance has been hindered by inflation concerns in Q1 2024, stalling its upward trajectory despite hitting record highs near $74,000 pre-halving. The subsequent consolidation has confined BTC within the $60,000 to $70,000 range. However, the recent inflation report hints at a potential alleviation of inflationary pressures, possibly shifting market dynamics in favor of Bitcoin.
Historically, May has been unfavorable for Bitcoin, often experiencing declines. Yet, 2024, being an election year, may diverge from this trend, potentially catalyzing bullish momentum. Long-term prospects for Bitcoin remain positive, driven by anticipated rate cuts, the halving, government expenditure, and rising demand for spot Bitcoin ETF, possibly propelling BTC beyond $100,000 in 2024 or 2025.
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