🚨 Inflation data could be the key to Bitcoin’s next major price surge, according to a leading crypto analyst. 👀
Bitcoin’s price movements may seem random, but critical drivers like inflation are at the heart of its behavior, says Markus Thielen, head researcher at 10x Research. According to Thielen, Bitcoin will need to see a slowdown in U.S. inflation when the Consumer Price Index (CPI) results are released next month to consider surpassing its all-time highs from March.
“If inflation prints 3.3% or lower, Bitcoin should make a new all-time high,” Thielen stated in a May 29 report, ahead of the U.S. Bureau of Labor Statistics (BLS) releasing the CPI results on June 12. This would represent a slight decrease from the previous CPI result of 3.4% reported on May 15.
Thielen anticipates that, in the weeks leading up to the May CPI release, spot Bitcoin exchange-traded funds (ETF) inflows will “remain strong” in anticipation of favorable inflation data. However, if CPI results exceed expectations, momentum could weaken, as has been observed earlier this year.
Spot Bitcoin ETF Inflows and CPI Impact
Since May 13, spot Bitcoin ETF inflows tracked by Farside data have been positive daily, peaking on May 21 with $305.7 million in inflows. Thielen argues that Bitcoin’s price movements are not random but are influenced by critical drivers, with inflation being a primary factor.
Throughout this year, Bitcoin’s price has often declined following higher-than-expected CPI results. For instance, on April 10, when the CPI printed at 3.5%, just 0.1% higher than expected, Bitcoin’s price dropped 6.67% to $56,000 by April 30.
Historical CPI Influence on Bitcoin
Thielen highlighted that when spot Bitcoin ETFs launched on January 11, there were substantial inflows of $611 million on the first day. However, the rest of January’s inflows were disappointing, largely due to CPI results exceeding expectations. The CPI came in at 3.4%, higher than the expected 3.2% and the previous month’s 3.1%.
“It is no coincidence that Bitcoin was weak in January, stronger into March, but then consolidated for two months,” Thielen noted.
As the crypto market awaits the next CPI release on June 12, all eyes will be on whether inflation data meets or falls below the critical 3.3% mark, potentially paving the way for Bitcoin to achieve new heights.
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