Bitcoin Cracks $28K on CPI Amid US Inflation Warning ‘Highly Elevated’
Bitcoin (BTC) ticked higher around the May 10 Wall Street open as US inflation data beat expectations.
Markets are eyeing a pause in the June Fed rate hike
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reacted immediately to the April Consumer Price Index (CPI), up 1.7% on the day.
The pair saw local highs of $28,328 on Bitstamp before consolidating just above the $28,000 mark.
CPI had come in at 4.9% year-on-year, a shade below the expected 5.0%. This provided a clear signal that inflation in the US continued to decline, once again in line with predictions from both the Federal Reserve and external sources.
“Fed’s data addiction starts well, strong jobs data and now inflation as expected … break in June at this stage,” financial commentator Tedtalksmacro wrote in part of a Twitter reply.
Tedtalksmacro referred to the impact of CPI and other economic data on the Fed’s interest rate policy, with markets already expecting a pause in rate hikes next month.
Fed Chairman Jerome Powell has repeatedly stated that such data releases dictated policy to a significant extent.
A pause in interest rate hikes would be a boon for risk assets, including crypto, as slack economic conditions should increase investor risk appetite.
Data from CME Group’s FedWatch tool showed market expectations for a June pause jumping from 80% to 90% on the CPI.
However, while Bitcoin and altcoins posted modest gains, investment research platform Game of Trades warned that today’s CPI numbers showed that the US economy was not yet out of the woods.
– The decline in inflation is mainly driven by the flexible part of the CPI. The sticky part still remains extremely elevated,” it told Twitter followers.
Bitcoin traders “protect” the key trend line
Prior to the CPI release, on-chain analytics resource Material Indicators looked at the Binance order book composition for future BTC prices.
Related: Binance ‘FUD’ Meets CPI – 5 Things to Know in Bitcoin This Week
It noted reducing volume near the current spot price, adding that bids sought to protect the integrity of the 200-week moving average (MA) just above $26,000.
“Remember liquidity dampens volatility. FireCharts shows decent bid liquidity protecting technical support at 200-week moving average. Upside currently has less volume near active trading area,” it in summary in part of today’s commentary.
Bitcoin has been trading above the 200-week MA since mid-March.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
