- US CPI year-over-year measure declined to 5.2% in March, coming in at market expectations.
- Bitcoin price climbed in response to the CPI release, resuming its uptrend above the $30,500 level.
- Upcoming FOMC Minutes could offer further insight on the Fed’s rate outlook and likely impact on Bitcoin’s recent gains.
The US Bureau for Labor Statistics (BLS) released Consumer Price Index (CPI) data for March. Both CPI YoY, at 5% and CPI MoM at 0.1% came in below market expectations, supporting Bitcoin’s bullish thesis.
The asset climbed past the $30,500 level ahead of the release and experts believe BTC is likely to continue yielding gains for holders with CPI coming in at market expectations.
Also read: Breaking: US annual CPI data declines to 5% in March vs. 5.2% expected
Bitcoin price rally gains strength with US CPI release
Bitcoin price witnessed a massive gain in its price (see the five-minute chart from TradingView) as BTC holders rejoiced. The headline Consumer Price Index data figures came in below market expectations, fueling a bullish sentiment and a positive reaction among market participants.
BTC/USD 4-hour price chart
Bitcoin price has recently outperformed stocks and witnessed a higher correlation with Gold, rather than Nasdaq 100, setting the stage for its gains. On Bitcoin shorter time frame charts, the US CPI release has triggered a large bullish engulfing candle.
BTC/USD 5-minute price chart
Bitcoin is therefore likely to sustain its recent gains and the largest asset by market capitalization is positioned for a run up to $32,000. The 28,000 - $32,000 level is a key range where Bitcoin price faces resistance, since June 2022. A rally past $32,000 could clear the path for BTC to hit the $35,000 bullish target.
Macroeconomic outlook shifts: Bullish for BTC
A soft inflation report has increased the selling pressure on the US Dollar. This is positive for risk assets like Bitcoin, Ethereum and cryptocurrencies. Market participants are now awaiting a confirmation of a shift in the Federal Reserve’s outlook to “dovish” and investors will watch the FOMC Minutes (to be published on Wednesday at 18 GMT) closely to gather more clues on the Fed's next steps and decisions on rate hikes in 2023.
At the time of writing, nearly all cryptocurrencies in the top 30 assets by market capitalization have yielded gains in response to the US CPI data release.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.