The cryptocurrency market experienced a significant surge following the release of the latest US Consumer Price Index (CPI) data. Bitcoin and Ethereum saw gains of 3.4% and 2.43% in the past 24 hours, respectively. Despite this positive movement, the market remains uncertain, with Bitcoin hovering around $70,000 and Ethereum struggling to surpass $4,000. Investors are treading cautiously as they await the outcome of the Federal Open Market Committee (FOMC) meeting tonight.
Interestingly, there has been a notable shift in market sentiment, particularly among retail traders on platforms like Binance. Recent findings from Hyblock suggest that 70.25% of accounts on Binance currently hold net long positions on Bitcoin, a significant increase from just 24 hours prior. This indicates that retail players are increasingly looking to “buy the bottom” and are optimistic about a potential rebound in the market ahead of the FOMC meeting.
It is essential to note that this bullish behavior by retail investors comes in the midst of ETF outflows, signaling investor caution. Data compiled by Farside revealed that Grayscale’s GBTC saw the largest net outflows of $121 million, followed by ARK Invest’s ARKB with $65.5 million and Bitwise’s BITB with $11.7 million. This trend of outflows has brought an end to the 19-day streak of net inflows for Bitcoin ETFs in the US, with outflows totaling nearly $65 million the day before.
Lower inflation figures are expected to further boost the crypto market, which has been range-bound for weeks. In May, the CPI remained essentially unchanged, exceeding the previously estimated increase of 0.1% but declining from April’s increase of 0.3%. Annually, CPI rose by 3.3%, slightly below both predictions and April’s figure of 3.4%. The recent price movements and the increase in retail long positions may indicate that Bitcoin had already priced in the latest CPI data and the upcoming Fed decision.
Experts in the field, such as IREN board member Mike Alfred, describe Bitcoin as a “highly intelligent global macro asset” that has the ability to anticipate and incorporate major economic factors well before their release. Charlie Bilello, Chief Market Strategist at Creative Planning, highlighted the US CPI figures, stating that US inflation has been above 3% for 38 consecutive months, with Core CPI (excluding Food/Energy) decreasing to 3.41% year-on-year from 3.62% last month.
The latest economic data and market trends indicate a complex interplay between macroeconomic factors and investor sentiment in the cryptocurrency market. As investors continue to monitor the outcome of the FOMC meeting and navigate the implications of inflation on asset prices, the future trajectory of Bitcoin and other cryptocurrencies remains uncertain yet intriguing.
Leave a Reply