The Consumer Price Index (CPI) is considered one of the indicators that greatly influences traditional financial markets.
Recently, this indicator has also had a significant impact on the crypto market, according to a report issued on May 29 by analyst and researcher Markus Thelen.
Spot flows into Bitcoin ETFs now closely track CPI data releases, and these flows resumed and accelerated when CPI data showed a decline in inflation compared to the previous month.
Correlation with the Consumer Price Index (CPI):
The report predicts that inflows from Bitcoin ETFs will likely remain strong over the next two weeks before the release of CPI data on June 12, which could push the price of Bitcoin to all-time highs.
Analysis comparing the price of Bitcoin over the past six months to US inflation data showed that Bitcoin was trending lower when the CPI was above expectations, and moving higher when the data was lower than expectations.
Markus Thelen noted that traders who understand how Bitcoin interacts with the CPI should be able to confidently trade in the opposite direction of monthly changes in the index.
