Bitcoin’s New All-Time High to Come after US CPI Drops Under 3.3%

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As a researcher with a background in financial markets and experience in analyzing cryptocurrency trends, I believe that the current price action of Bitcoin can be largely attributed to macroeconomic factors, specifically inflation data. The recent consolidation within the $60,000-$70,000 range is likely to persist unless a clear breakout above $70,000 occurs. However, if the May Consumer Price Index (CPI) data comes in below expectations on June 12, as suggested by Markus Thielen of 10x Research, we could see a significant price rally for Bitcoin.

After undergoing a significant price shift following the Bitcoin halving event in late April, the cryptocurrency’s value has entered a phase of stability. Lately, BTC‘s price oscillates between $60,000 and $70,000. Should Bitcoin fail to surpass the $70,000 threshold with confidence, this consolidation period may persist for longer.

Macros have the power to significantly influence Bitcoin’s price and potentially push it beyond its previous record highs in March 2024. According to a recent report from 10x Research, published on May 29, if the inflation rate for May turns out to be below 3.3%, then we can expect Bitcoin’s price to surge to new all-time highs. The Consumer Price Index (CPI) data for this month will be unveiled by the US Bureau of Labor Statistics on June 12.

As a crypto investor, I’ve observed a slight decrease of 0.1 percentage points in the Consumer Price Index (CPI) since the last reading on May 15, which stood at 3.4%. Despite this, I expect strong inflows into Bitcoin spot Exchange-Traded Funds (ETFs) to continue in the two weeks leading up to the release of the May CPI results.

If the Consumer Price Index (CPI) figures surpass expectations, they could dampen Bitcoin’s price growth, as observed in early 2023. On a more optimistic note, substantial investments have been flowing into Bitcoin spot Exchange-Traded Funds (ETFs) during the last two weeks of May.

Inflation Is the Main Driver for Bitcoin Price

As an analyst, I’ve observed that Bitcoin’s price movements aren’t haphazard but are largely influenced by significant factors such as inflation. In the year 2024, there have been numerous occasions where the Bitcoin price has mirrored inflation trends. Specifically, following the release of higher-than-anticipated Consumer Price Index (CPI) data, the price of Bitcoin has seen a decline.

On the 10th of April, the Consumer Price Index (CPI) was announced at a 3.5% rate, slightly more than the forecasted figure. By contrast, Bitcoin’s price had dropped by 6.67%, or approximately $9,400, to reach $56,000 as of the 30th of April. Thielen noted that, following the launch of spot Bitcoin Exchange-Traded Funds (ETFs) on January 11, there were strong inflows of over half a billion dollars on the initial day. However, subsequent inflows in January fell short of expectations. In his analysis, Thielen attributed this trend mainly to the unexpectedly high CPI figures.

“According to Thielen’s analysis, the Consumer Price Index (CPI) registered a 3.4% increase, which was greater than the anticipated 3.2% and surpassed the 3.1% figure from the previous month. It is worth noting that Bitcoin exhibited weakness in January but gained strength into March, only to stabilize for two consecutive months.”

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2024-05-30 14:12