Bitcoin Soars on Cooling Inflation Data

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This post was originally published on cryptonewsfarm.com

Bitcoin Rallies on Cooling US Inflation Data, Eyes Now on Fed Meeting

Bitcoin surged higher as the June 12th Wall Street session opened, fueled by a surprise drop in US inflation data.

Data from Cointelegraph Markets Pro and TradingView captured a sudden spike in Bitcoin’s price to $69,636 on Bitstamp. This represented a gain of $1,500 within seconds, triggered by the release of the May Consumer Price Index (CPI) report. The report showed inflation cooling faster than expected.

Compared to the previous month, the CPI remained unchanged. Year-on-year inflation also came in lower than forecasts at 3.3%. “The all items index rose 3.3 percent for the 12 months ending May, a smaller increase than the 3.4-percent increase for the 12 months ending April,” confirmed a press release from the US Bureau of Labor Statistics.

This positive news boosted risk assets like cryptocurrency, which had been under pressure leading up to the CPI release, mirroring a common trend for Bitcoin and altcoins.

All Eyes on the Fed

Markets now turn their attention to the Federal Open Market Committee (FOMC) meeting later on June 12th. The Federal Reserve’s decision on interest rate adjustments, as well as commentary from Fed Chair Jerome Powell, will significantly impact investor sentiment.

Financial commentator Tedtalksmacro expressed optimism in response to the latest developments. He suggested the CPI data might give Powell room to consider easing the current tight monetary policy of high interest rates. “The stage is set for J Powell to talk easing. Let’s go,” he summarized on a social media platform.

Michaël van de Poppe, founder and CEO of MNTrading, highlighted the weakening US dollar after the data release. “The Dollar and Treasury Yields are dropping significantly as the markets are expecting rate cuts to be happening,” he noted. “This could be the massive sign for Altcoins and Bitcoin.”

Shifting Tides and Potential Volatility

Bitcoin has now recovered from the losses it incurred earlier in the week following US employment data. Similar economic data releases are expected later this week, which could bring further volatility to Bitcoin’s price.

Market expectations regarding potential rate cuts are also shifting, according to the latest estimates from CME Group’s FedWatch Tool. The tool indicates a greater than 70% chance of a rate cut happening at the September FOMC meeting.

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Author: Sb

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