Bitcoin back above $81,000 after hot CPI print, BNB, DOGE lead majors gains
Bitcoin Price Resilient Despite Inflation Scare
Bitcoin, represented by the symbol BTC, showed remarkable resilience in the face of an inflation scare that rocked traditional markets. The largest cryptocurrency initially dropped to $79,879 following the release of the April Consumer Price Index, which came in at 3.8% year-over-year, exceeding economists’ expectations. However, Bitcoin quickly rebounded to $81,208 by the Asian morning on Wednesday, ultimately ending the session with a modest 0.3% gain over 24 hours.
In comparison, other major cryptocurrencies experienced mixed performance during the same period. BNB led the way with a 2.5% increase to $677, while dogecoin saw a 1.3% rise to $0.1114. Ether, on the other hand, dropped by 0.3% to $2,300, making it the weakest performer among the group. Solana slipped by 0.6% to $95.52, and XRP traded at $1.45, down 0.5% for the day.
While the CPI print had a more significant impact on traditional markets, with the S&P 500 and Nasdaq 100 both experiencing declines, the crypto market remained relatively stable. The two-year Treasury yield hovered just below 4%, while Japan’s 20-year bond yield reached its highest level since 1997. Despite these global inflationary pressures, Bitcoin managed to hold steady at $81,000.
Positive sentiment continues to underpin the crypto market, with CoinShares reporting significant inflows into crypto funds last week. Bitcoin products attracted $706 million in investments, while ether, solana, and XRP also saw substantial inflows. Notably, there was a significant outflow of $14 million from bitcoin short positions, indicating a shift in market sentiment towards a more bullish outlook.
FxPro’s chief market analyst, Alex Kuptsikevich, highlighted that Bitcoin’s momentum has slowed down as it approaches the 200-day moving average. However, he noted that the market has failed to break through this key trend line in the past six days, suggesting that the current correction may be temporary.
The recent surge in inflows coincided with progress on regulatory issues related to stablecoins, which could provide a much-needed tailwind for the market. As Bitcoin continues to hold above $81,000, despite challenging macroeconomic conditions, it is evident that structural buyers are still active in the market.
Looking ahead, the upcoming Senate Banking Committee meeting to discuss the CLARITY Act and the release of new macroeconomic data will serve as a crucial test for Bitcoin’s resilience. Overall, the cryptocurrency market remains cautiously optimistic, with potential for further upside if regulatory developments continue to be favorable.
