- US inflation data exceeded expectations, causing a temporary market slump.
- Bitwise CIO claimed that US CPI data has little impact on BTC price movement.
After the release of better-than-expected US CPI (Consumer Price Index) data on April 10, there was a brief period of turmoil in the market. The year-on-year CPI was 3.5% and the month-on-month inflation rate was 0.4%.
That meant inflation was rising rather than falling, and analysts thought the expected Fed rate cuts starting in June could stall. Based on negative data, Bitcoin [BTC] It fell to $67.5,000, but quickly recovered.
However, Bitwise CIO Matt Hougan said: fired Please note the following about the impact of US CPI data on BTC price movement:
“We do not believe this move will weaken the consumer price index (CPI), which is stronger than expected. Whether the Fed cuts interest rates by 25 bps in June is not a long-term driver of Bitcoin price at this point. It is an element of
Bitwise executives added:
“ETF flows and deficit growth are more important, and they line up very well for Bitcoin.”
Bitcoin regains $70,000
The executive cited the rising U.S. budget deficit, which has worried some key players, including Galaxy Digital's Mike Novogratz.
A deficit occurs when government spending exceeds national revenue and the national debt increases. These are ripe conditions for the devaluation of currencies such as the US dollar. In such a scenario, Bitcoin and gold could benefit.
However, the president reiterated that the Fed could cut rates before the end of the year. Some market watchers believe this provides a breather and an end to the brief market disaster of April 10th.
At the time of writing, BTC was trading at $70.7,000, above key trendline resistance as the halving inched closer.
However, the open interest (OI) rate fluctuated per Coinglass data. OI tracks contracts opened in the futures market and, in turn, the amount invested in his BTC (liquidity).
This signals near-term market indecision as the halving approaches, and is a cause for caution.
