Bitcoin
Bitcoin Having Best Day Since March After Coldest April Inflation Reading
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Bitcoin jumped with actions on Wednesday, after the April consumer price index showed that inflation eased from the previous month.
The cryptocurrency’s price last rose more than 5% to $64,910.57, according to Coin Metrics, and is on track for its best day since March 25. At one point, bitcoin traded above its 50-day moving average for the first time since. April 13, although it fell below that level again.
“The slightly lighter than expected CPI number modestly increased the chance of a rate cut, which is still a strong influencer for the price of bitcoin,” Owen Lau, an analyst at Oppenheimer, told CNBC. “After ETFs and halving, the next big catalyst is a rate cut. Bitcoin will likely remain range-bound and trade alongside macro data points until we see a clearer path to rate cuts.”
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Bitcoin jumps after US inflation relief report
O consumer price indexa broad measure of how much goods and services cost at the cash register, increased 0.3% compared to March, the Labor Department’s Bureau of Labor Statistics reported Wednesday. This was slightly below the Dow Jones estimate of 0.4%. Consumer prices are still rising 3.4% year-over-year.
“With core US CPI cooling for the first time in six months, we could be seeing a rebound in investor appetite for risky assets like crypto, instigating more flows into spot bitcoin ETFs, which have been especially muted over the past week.” “, said Leena ElDeeb, analyst at 21Shares.
“Although with rate cuts still on the cards, the recovery could be slow,” she added. “Typically, higher interest rates make risky assets like technology stocks and bitcoin less attractive, as investors can lock in substantial yields from safer options like U.S. Treasury bonds.”
Bitcoin occupies a unique position as both a risk-free and a risk-free asset, and many investors have a long-term view of the crypto asset, ElDeeb explained, adding that while the Fed’s policies may induce volatility in bitcoin in the short term, it does not fundamentally alters the long-term trajectory of bitcoin.
Lately, bitcoin has been more heavily influenced by macro factors, with industry catalysts such as the launch of bitcoin exchange-traded funds and the halving in the rearview mirror. Earlier this week, bitcoin also missed out on a two-day revival of the meme stock craze.
With Wednesday’s gain, bitcoin is up 7% for the week – its best week since March 29 – and is on track to break a six-week decline.
Bitcoin has held between $60,000 and $70,000 – minus a few points above and below that range – since March, when it reached new all-time highs and quickly retreated. Investors and analysts expect the cryptocurrency to remain range-bound for several more months in the absence of strong catalysts.
– CNBC’s Jeff Cox and Nick Wells contributed reporting.