Bitcoin (BTC) experienced a surge in price before the Wall Street opening on April 12th as United States inflation data exceeded market forecasts.
CPI offers “great inflation print” for risk-on bulls
Data from Cointelegraph Markets Pro and TradingView followed the BTC/USD pairing as it neared new 10-month highs on Bitstamp.
Widely anticipated volatility occurred immediately upon the release of Consumer Price Index (CPI) data for March. The results broadly aligned with forecasts, with the year-on-year increase coming in 0.2% lower than anticipated.
“The all items index increased 5.0 percent for the 12 months ending March; this was the smallest 12-month increase since the period ending May 2021,” confirmed an accompanying press release from the U.S. Bureau of Labor Statistics.
Nonetheless, this was sufficient to spark some optimistic upside on crypto markets ahead of the Wall Street opening, with potential further upside in line with equities to come.
Markets commentator Tedtalksmacro called the result a “great inflation print for the bulls.”
U.S. CPI
Headline +5.0 YoY (Est. +5.2%)
Core +5.6% YoY (Est. +5.6%)
As expected, with headline coming in slightly lower than forecast.
— tedtalksmacro (@tedtalksmacro) April 12, 2023
Since CPI is known as a classic catalyst for “fakeout” price action, market participants have urged caution.
Popular analytics resource Skew predicted that the “market will hunt liquidity like every other CPI day,” with significant moves likely to spark liquidations on exchanges.
“CPI overall says slowing inflation CPI core says sticky inflationary conditions still,” commented a further post on Twitter about the likely U.S. macroeconomic policy path going forward.
“Probably one more hike. May data needs to confirm interest rate hike shock in order for the FED to actually consider a pause in the hiking cycle.”
Market expectations on rate hikes experienced only modest movement despite the improvement in CPI data.
According to CME Group’s FedWatch Tool, there remained a 65% chance of a hike at the next Federal Open Market Committee (FOMC) meeting in three weeks’ time, down from 75% before the release.
Bitcoin bulls gain confidence in long-term trend
The latest BTC price action further bolstered longer-timeframe bets that Bitcoin had broken out of its bear market.
Related: Bitcoin holds $30K, but some pro traders are skeptical about BTC price continuation
Popular trader and analyst Rekt Capital noted that BTC/USD was continuing to build on its impressive daily close from April 11th, which had taken it above a major resistance trendline.
“BTC is showing initial signs of a successful retest of the Higher High resistance into new support,” stated his latest analysis on Twitter.
Related: Crypto audits and bug bounties are broken: Here’s how to fix them
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