As I wrote last week, the Bitcoin price (Swedish version) has been on a tear during the month of May with the release of today’s inflation numbers and upcoming Fed meeting looming in the background. Bitcoin did in fact begin to fall over the weekend - to as low as $66,000 yesterday, but had been hovering between $67,000 - $68,000 in the hours leading up to the release of the CPI numbers. Immediately after the release of the numbers, Bitcoin came very close to the $70,000 mark again.
NBX maintains its position as the best cryptocurrency exchange in the Nordics when it comes to AML.
Data from the Bureau of Labor Statistics (BLS) reveals that the Consumer Price Index (CPI) in the United States for the month of May experienced a 0.0% increase month-over-month and a 3.3% increase year-over-year. Economists surveyed by Dow Jones had previously anticipated a rise of 0.1% and an annual increase of 3.4%. Consequently, the CPI was lower than the month-over-month forecast and the year-over-year forecast. Core CPI, which excludes food and energy, was reported at 0.2% month-over-month and 3.4% year-over-year, also coming in lower than the economists’ preliminary forecasts, respectively 0.3% and 3.5%.
The crypto market responded favourably to the CPI figures coming in lower than expected, but today’s show is not over yet and seemingly the market is showing signs of reluctance. The reason for this, as many analysts have pointed out, is the fact that today's events act as a two-stage rocket. The first, of course, being the release of the CPI, but the latter is today’s Fed meeting. The Federal Reserve is set to announce its interest rate decision at 2 p.m Eastern Time, with the consensus predicting no alterations to the current interest rate level. Fed Chair Jerome Powell will then hold a press briefing at 2:30 p.m and even though the interest rate is likely to remain unchanged, market participants will scrutinize any statements made in terms of the road ahead.
Nonetheless, as all the key components came in lower than anticipated, it bodes well for positive revisions in the Fed’s “dot plot” of interest rate expectations. Should the Fed lower interest rates this year, it surely will act as a further catalyst for both Bitcoin and the crypto market in general.
As the cumulative flow of the spot Bitcoin ETFs has been in negative terrain for two days running - the CPI numbers may help to turn the tide. According to Farside, the net flow amounted to $64.9 million in outflow on Monday and $200.4 million in outflow yesterday.
This text is intended to inform and is not an investment recommendation.
Best regards,
Adam Jakobsen.
NBX.
