Bitcoin (BTC) Surges Amid US Inflation Data, Sparks Optimism for Early Fed Rate Cuts

• Bitcoin price rises as new consumer sentiment and inflation data raises hopes of Fed rate cuts in September.
• The University of Michigan Consumer Sentiment and 5-Year Inflation Expectations data was positive for the U.S. economy.
• BTC price rises above $69,000 as traders look for more upside.

Bitcoin price surges amid positive consumer sentiment and inflation data, sparking hopes for Fed rate cuts in September.

Bitcoin Price Sets Strong Upside Moves

Bitcoin price recorded a slight upside move on Friday as the top crypto’s chart pattern strengthens. BTC price saw a breakout pattern earlier this week, and the bulls are again gaining upside momentum after a retest of the trendline. Meanwhile, new inflation outlook data has raised hopes of Fed rate cuts starting September.

The University of Michigan Consumer Sentiment and 5-Year Inflation Expectations data was positive for the U.S. economy. The consumer sentiment for the US came in higher at 69.1 in May. Inflation expectations for the year-ahead declined to 3.3% from 3.5%, and the five-year inflation outlook was steady at 3%, unchanged from April and below an earlier reading of 3.1%.

As a result, the strong US dollar index (DXY) dropped to a low of 104.64, falling from the high dollar index of 105. The strong US 10-year Treasury yield also fell to 4.467%. As Bitcoin moves opposite to DXY and Treasury yields, the pressure has eased, and CME FedWatch Tool indicates a 45% odds of 25 bps rate cuts in September.

Market Reaction and Trader Sentiment

BTC price jumped 3% in the past 24 hours, with the price currently trading at $69,000. The 24-hour low and high are $66,356 and $69,220, respectively. Furthermore, the trading volume has increased by 7% in the last 24 hours, indicating a rise in interest among traders.

Coinglass data indicates $22 million in Bitcoin short positions were liquidated in the last 24 hours, with the most liquidation happening in the last 12 hours. Over 75K traders were liquidated in the past 24 hours, with the largest single order liquidation happening on Binance as some traded ETHUSDC valued at $12.41 million.

Future Outlook

Buying is recorded in futures and options, with total BTC Futures open interest rising across crypto exchanges. The CME Futures OI increased to $10.46 billion.

Conclusion

The recent positive consumer sentiment and inflation data have provided a bullish outlook for Bitcoin, with traders anticipating potential Fed rate cuts in September. The increase in trading volume and liquidation of short positions indicate a strong market sentiment towards further upside. As the market continues to react to economic indicators, Bitcoin’s price trajectory will be closely watched by investors and analysts alike.