Key Points
- Bitcoin’s price is expected to hit a new all-time high if US CPI drops below 3.3%.
- Inflation is considered a significant factor influencing Bitcoin’s price movements.
Bitcoin has been experiencing a period of intense consolidation since the Bitcoin halving event in April.
The price of Bitcoin has been oscillating between $60,000 and $70,000 for several weeks. A convincing breakout above the $70,000 mark is needed for the consolidation phase to end.
US CPI and Bitcoin’s Price
Markus Thielen, head of 10x Research, suggested that macroeconomic factors could push Bitcoin past its March 2024 all-time high. Thielen stated in a recent report that if May’s inflation print is less than 3.3%, Bitcoin could reach new all-time highs. The Consumer Price Index (CPI) data for May will be released by the United States Bureau of Labor Statistics (BLS) on June 12.
Thielen pointed out a slight 0.1 percentage point decrease from the previous CPI reading, which stood at 3.4% as of May 15. He expects robust inflows into spot Bitcoin exchange-traded funds (ETFs) to continue in the two weeks leading up to the release of the May CPI results.
However, if the CPI figures are higher than expected, it could dampen Bitcoin’s price momentum. Despite this, there has been a strong inflow into spot Bitcoin ETFs in the last two weeks of May.
Role of Inflation in Bitcoin’s Price
Thielen also mentioned that Bitcoin’s price movements are not random but are influenced by key factors like inflation. In 2024, there have been several instances where Bitcoin’s price has moved in line with inflation and dropped after the CPI data exceeded expectations.
On April 10, the CPI was reported at 3.5%, just 0.1% higher than expected. By April 30, Bitcoin’s price had dropped by 6.67% to $56,000. When spot Bitcoin ETFs were launched on January 11, despite an impressive $611 million in inflows on the first day, the overall inflows for the rest of January were lackluster. Thielen attributed this primarily to the CPI results exceeding expectations.
He noted that Bitcoin’s weakness in January and strength in March, followed by two months of consolidation, was not a coincidence, but was influenced by the CPI results.
