Altcoins
Bitcoin and Altcoin Soar as US CPI Rate Drops to 3.3%
The United States reported a notable decline in its Consumer Price Index (CPI) annual rate for May, signaling a significant change in economic trends. The annual CPI rate fell to 3.3%, slightly below the expected 3.4% and the previous 3.4%.
Likewise, the unadjusted kernel Annual CPI rate fell to 3.4%, below the expected 3.5% and the previous 3.6%. This decline marks the lowest annual core CPI rate since April 2021.
The Challenges of Inflation in the Housing Sector
Despite the overall decline in inflation rates, concerns remain, particularly in the housing sector. Housing inflation rose 0.4% in May and 5.4% year-on-year. Housing costs, given their significant weight in the CPI calculation, pose a persistent challenge for the Federal Reserve in its efforts to combat inflation.
How did the markets react?
The crypto market has shown signs of recovery in response to the CPI report. QCP, a prominent market analyst, noted an increase in call option buying on June 13, indicating that investors were bracing for a potential upside surprise.
Additionally, there was a significant increase in the funding rate, suggesting that the market is poised to retest its highs if the CPI numbers align with expectations and the meeting results of the Federal Open Market Committee (FOMC) remain neutral. This alignment has sparked a rapid renaissance among almost all of the top ten cryptocurrencies.
Bitcoin responded positively to the release of CPI data, up 2% at the time of publication. Ethereum followed suit with a 2.4% increase. Other major cryptocurrencies, such as Binance Coin (BNB) and Solana (SOL), also saw gains of 2.2% and 3.8%, respectively.
Bullish sentiment in the markets!
Bitcoin and Ether spot prices remained relatively stable as traders eagerly awaited the release of CPI data and the results of the FOMC meeting. Bullish sentiment is now high, with QCP noting that BTC futures swap points have bounced off a low of 10%, rallying as traders closed their short futures positions to take profits on their basis trades.
This bullish environment suggests that yields could be pushed higher, potentially exceeding 15%. Given the current positive market momentum, Bitcoin could soon reach $70,000.
Read also: Why Bitcoin Price Soared Above $69,000 Today?
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