Data Overview:
Last night, the United States released the latest statistics on the Consumer Price Index (CPI). The annual growth rate reached 3.4%, which was consistent with market expectations. The month-on-month increase was 0.3%, slightly lower than the market expectation of 0.4%. After excluding food and energy costs, the annual growth rate of the core CPI was 3.6%, and the month-on-month increase was 0.3%, which was exactly in line with market expectations. For more detailed information, please refer to Weibo Tuantuan Finance.
Impact of CPI data:
The Federal Reserve (FED) usually regards the core CPI as a more reliable inflation indicator because it can exclude volatile cost factors such as food and energy, thus more accurately reflecting the underlying inflation trend. The core CPI data in April remained within the market's expectations, which helped maintain the Fed's dovish stance on interest rate adjustments. At the same time, it also further alleviated market concerns that the Fed may raise interest rates again due to increased inflationary pressures. For investors in risky assets, this is undoubtedly a shot in the arm.
Risk assets rebound:
As inflation data showed an optimistic trend, risky assets began to rebound. Among them, many indexes of U.S. stocks hit record highs. The Nasdaq Composite Index hit a new high at the close of two consecutive trading days, up 231.21 points, or 1.4%. The S&P 500 rose 61.47 points, or 1.2%. The Dow Jones Industrial Average was not to be outdone, with an increase of 0.9%. It is worth mentioning that this is the first time since March 21, 2024 that the three major indexes have hit record highs on the same day.
Positive response from the cryptocurrency market:
Cryptocurrency markets also benefited. Bitcoin (BTC) rebounded above $66,000 for the first time since April 24, reaching a high of $66,567. In the past 24 hours, it has risen by more than 7%. At the time of writing, the price of Bitcoin is $66,111. Ethereum (ETH) also rebounded above $3,000, and was quoted at $3,019 at the time of writing, a single-day increase of 4.2%.
Market Trends and Forecasts:
The current CPI data is optimistic and has opened a new market. It is predicted that inflation will continue to decline in the coming months, bringing more good news to the market. The CPI showed signs of cooling for the first time in the past three months, which may be an important reversal signal and is expected to drive market sentiment to a bullish turn. From the perspective of on-chain data, it also shows a favorable trend.
Investment advice and risk warning:
As for the next move of Bitcoin, its surge this morning has successfully broken through the downward trend line that has restricted prices in the past few weeks. This breakthrough is likely to open the door to $71,000 for Bitcoin. If this resistance level is successfully reversed, the next goal will be to see a new all-time high of $84,000. However, investors should also pay attention to the risk factors in the market. There are currently two main aspects that pose a threat to the cryptocurrency circle: one is the war between Israel and Hamas. If the conflict expands, the cryptocurrency circle may be affected; the other is that the deadline for the release of the Mentougou coin is October this year, and you may need to be extra careful when approaching September.
In terms of investment strategy, investors are advised to remain patient and hold strong currencies. For currencies that earn a lot and have a heavy position, some stop-profit operations can be appropriately carried out. At the same time, investors with short positions can enter the market when the market pulls back to a suitable position, for example, when the Bitcoin price pulls back to about $63,500 and confirms support, they can buy.
Other profit opportunities and sector hot spots:
In addition to Bitcoin and Ethereum, investors can also pay attention to other potential currencies and sectors such as Sol ecology, Meme ecology and AI ecology. These sectors may contain more profit opportunities. For example, jup, ray and jto in the Sol ecology and Meme People, Floki Meme, Bome and Bonk in the Meme ecology are all hot projects worth paying attention to. At the same time, WLD, Arkm and Agix in the AI ecology also have great development potential. You can continue to hold the existing spot goods, and you are welcome to consult at any time to get more professional advice on how to allocate positions, when to buy and when to sell, and how to select strong sectors.
