Coinspeaker Bitcoin’s New All-Time High to Come after US CPI Drops Under 3.3%
Bitcoin price has entered a period of strong consolidation following the Bitcoin halving event last month in April. Over the past several weeks, BTC price has been fluctuating in the range of $60,000-$70,000. Unless Bitcoin gives a convincing breakout above the $70,000 level, it’s likely to consolidate for some more time.
However, the macros can play a key role here providing stimulus for Bitcoin to surpass its all-time high levels of March 2024. In a recent report published this Wednesday, May 29, 10x Research head Markus Thielen stated that if the inflation print comes to be less than 3.3% for the month of May, then Bitcoin price can rally to new all-time highs. On June 12, the United States Bureau of Labor Statistics (BLS) will be releasing the Consumer Price Index (CPI) data for this month.
Thielen noted a slight decline of 0.1 percentage points from the previous CPI reading, which stood at 3.4% as of May 15. He anticipates robust inflows into spot Bitcoin exchange-traded funds (ETFs) to persist in the two weeks leading up to the release of the May CPI results.
However, if the CPI numbers come to be greater than expected, it can weaken the BTC price momentum, as seen earlier this year. One of the positive indicators has been the strong inflows into the spot Bitcoin ETFs over the past two weeks of May.
Inflation Is the Main Driver for Bitcoin Price
Thielen also stated that Bitcoin price doesn’t usually make random moves, but rather is based on critical drivers such as inflation. Throughout this year in 2024, there have been multiple instances where BTC price has moved in tandem with inflation and dropped following the higher-than-expected CPI data.
On April 10, the CPI was reported at 3.5%, just 0.1% higher than anticipated. By April 30, Bitcoin’s price had fallen by 6.67% to $56,000. Thielen observed that when spot Bitcoin ETFs launched on January 11, despite an impressive $611 million in inflows on the first day, the overall inflows for the rest of January were underwhelming. He attributed this primarily to the CPI results being higher than expected.
“The CPI came in at 3.4%, higher than the 3.2% expected number and higher than the 3.1% recorded in the previous month. It is no coincidence that Bitcoin was weak in January and stronger into March but consolidated for two months,” Thielen wrote.
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Bitcoin’s New All-Time High to Come after US CPI Drops Under 3.3%