- Bitcoin’s price continues to be influenced by inflation expectations, with analysts closely monitoring upcoming data for potential new highs.
- According to a report by 10x Research, a slowdown in U.S. inflation is crucial for Bitcoin to surpass its March record.
- Markus Thielen, the chief researcher at 10x Research, emphasized that if inflation falls to 3.3% or lower, Bitcoin is likely to hit a new peak.
Discover how U.S. inflation data could propel Bitcoin to new heights and what analysts are predicting for the cryptocurrency market.
U.S. Inflation’s Impact on Bitcoin’s Record Highs
In a report dated May 29, Markus Thielen, the chief researcher at 10x Research, highlighted the critical role of U.S. inflation data in determining Bitcoin’s price trajectory. Thielen stated, “If inflation is 3.3% or lower, Bitcoin should make a new high.” This target represents a slight decrease from the previous Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics (BLS) on May 15.
Spot Bitcoin ETF Inflows and Market Sentiment
The report draws attention to the upcoming CPI announcement on June 12. Thielen expects strong inflows into spot Bitcoin exchange-traded funds (ETFs) leading up to the data release. However, he cautions that higher-than-expected inflation could weaken momentum, as seen earlier this year. Data from Farside shows consistent positive inflows into spot Bitcoin ETFs since May 13, with the highest daily inflow recorded at $305.7 million on May 21. This trend underscores the correlation between Bitcoin’s price and inflation movements.
Bitcoin Price Fluctuations Driven by Key Factors
Thielen emphasizes that Bitcoin’s price fluctuations are not random but are driven by critical factors, with inflation taking center stage. He cites several instances throughout 2024 where Bitcoin’s price dropped following higher-than-expected CPI readings. For example, after the April 10 CPI data showed a 3.5% increase, exceeding expectations by 0.1%, Bitcoin’s price fell by 6.67% within weeks, dropping to $56,000.
Spot Bitcoin ETF Launch and Initial Performance
The report also touches on the launch of spot Bitcoin ETFs on January 11. Despite a strong initial inflow of $611 million on the first day, January’s overall inflows were lackluster. Thielen attributes this to higher-than-expected CPI data released that month. The report states, “The CPI came in at 3.4%, higher than the expected 3.2% and the previous month’s 3.1%. Bitcoin’s weak performance in January, followed by a stronger March and two months of consolidation, is no coincidence.”
Crypto Market Awaits CPI Data
This analysis demonstrates a clear link between inflation data and investor sentiment towards Bitcoin. With the upcoming CPI announcement, the cryptocurrency market is on edge. A reading below 3.3% could trigger a price surge, potentially pushing Bitcoin to new highs. Conversely, higher-than-expected data could lead to a pullback. The persistent influence of inflation on the volatile world of cryptocurrencies remains evident.
Conclusion
In summary, the upcoming U.S. inflation data is pivotal for Bitcoin’s price movement. Analysts like Markus Thielen are closely watching the numbers, with a target of 3.3% or lower being crucial for new highs. Investors should stay informed and prepared for potential market shifts based on these economic indicators.
