Strong U.S. inflation data gives a fresh boost to BTC price performance, as Bitcoin bulls set their sights on a clear trend breakout.
Ahead of the Wall Street opening on April 12, Bitcoin (BTC) experienced a surge in price following the release of US inflation data, which exceeded market expectations.
The CPI provides a "great inflation print" for risk-on bulls.
BTC/USD approached new ten-month highs on Bitstamp, as reported by Cointelegraph Markets Pro and TradingView. As anticipated, the release of the March Consumer Price Index (CPI) data led to an immediate surge in volatility, with the year-on-year increase falling short of predictions by 0.2%.
Despite this, the accompanying press release from the U.S. Bureau of Labor Statistics confirmed that the all items index had risen 5.0% for the 12 months ending in March, marking the smallest increase since the period ending May 2021. This sparked optimistic upside on crypto markets, with potential for further gains in line with equities.
Market commentator Tedtalksmacro hailed the result as a "great inflation print for the bulls."
Market participants cautioned against overreacting, as CPI is a classic catalyst for "fakeout" price action.
Skew, a popular analytics resource, predicted that on CPI day, the market will search for liquidity as it usually does, with significant movements likely leading to liquidations on exchanges.
“CPI overall says slowing inflation CPI core says sticky inflationary conditions still,” a further post on Twitter commented 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 the FED to actually consider a pause in the hiking cycle.”
Despite the improvement in CPI data, market expectations for rate hikes only saw a modest shift. CME Group's FedWatch Tool indicated a 65% likelihood of a hike occurring at the next Federal Open Market Committee (FOMC) meeting in three weeks, compared to 75% before the data release.
Bitcoin bulls have become more confident in the long-term trend
Rekt Capital, a popular trader and analyst, observed that BTC/USD was building on its impressive daily close from April 11, which had pushed it above a significant resistance trendline. According to his latest analysis, "BTC is showing initial signs of a successful retest of the Higher High resistance into new support."
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