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Bitcoin soared along with stock prices on Wednesday after April's consumer price index showed inflation eased from the previous month.
The cryptocurrency's price last rose more than 5% to $64,910.57, its fastest pace since March 25, according to Coin Metrics. At one point, Bitcoin traded above its 50-day moving average for the first time since Bitcoin. However, on April 13th, it fell below that level again.
Oppenheimer analyst Owen Lau told CNBC: “The CPI number was a little lighter than expected, making a rate cut a little more likely, but it still has a strong impact on Bitcoin prices.” Told. “The next major catalyst for ETFs and halvings is a rate cut. Until we see a clearer path to rate cuts, Bitcoin is likely to remain range-bound and trade with macro data points.”
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Bitcoin soars after reports of US inflation easing
The Consumer Price Index, a broad measure of the prices of goods and services at the register, rose 0.3% from March, the Labor Department's Bureau of Labor Statistics said Wednesday. This was slightly below the Dow Jones forecast of 0.4%. Consumer prices are still rising 3.4% year-on-year.
“With the U.S. core CPI cooling for the first time in six months, investor appetite for risk-on assets such as cryptocurrencies may recover, leading to further inflows into Bitcoin spot ETFs, which have not been particularly active thus far. '' said 21Shares analyst Leena Eldeeb.
“Recovery may be slow, although rate cuts remain questionable,” he added. “Typically, when interest rates rise, risk-on assets like tech stocks and Bitcoin become less attractive as investors can lock in significant yield from safer options like U.S. Treasuries.”
Bitcoin occupies a unique position as both a risk-on and risk-off asset, and many investors view crypto assets from a long-term perspective, Eldeeb explained, and the Fed's policy is a short-term one. could trigger volatility in Bitcoin, he added. It does not fundamentally change Bitcoin's long-term trajectory.
Recently, Bitcoin has become more influenced by macro factors due to industry triggers such as the launch of Bitcoin exchange-traded funds and the halving in the rearview mirror. Earlier this week, Bitcoin also halted a two-day resurgence in the meme stock boom.
Wednesday's rally puts Bitcoin up 7% this week, its best week since March 29, and on pace to break a six-week decline.
Bitcoin has hovered between $60,000 and $70,000 since March, minus a few swings above and below that range, but it hit an all-time high in March. It was updated and immediately fell back. Investors and analysts had expected the cryptocurrency to remain range-bound for several more months absent a strong catalyst.
—CNBC's Jeff Cox and Nick Wells contributed reporting.
