Bitcoin Surges as Retail Investors Bet Big Amid CPI Data and FOMC Meeting Anticipation

• Bitcoin, along with the wider cryptocurrency market, experienced an uptrend following the latest release of US Consumer Price Index (CPI) data, setting the stage for tonight’s Federal Open Market Committee (FOMC) meeting.
• Bitcoin and Ethereum posted gains of 3.4% and 2.43% respectively in the last 24 hours, though market sentiment remains cautious with Bitcoin hovering near $70,000 and Ethereum struggling to surpass the $4,000 mark.
• There is a notable shift in sentiment among retail traders on Binance, as evidenced by their trading positions and recent market behavior.

Bitcoin and Ethereum react positively to the latest CPI data, as the crypto market awaits the FOMC’s upcoming decisions.

Retail Investors’ Long Positions Surge

Recent data from Hyblock indicates that 70.25% of accounts on the cryptocurrency exchange Binance hold net long positions on Bitcoin, a significant increase from just 24 hours ago when the figure stood at 57%. This suggests a growing optimism among retail investors who are attempting to “buy the bottom” in anticipation of a bullish market shift ahead of the FOMC meeting.

“Despite current price declines, retail investors are heavily leaning towards long positions. As of now, 70.25% of Binance accounts are net long on BTC, up from 57% just yesterday. This indicates ongoing attempts to buy the bottom.”

This pattern of investor behavior is noteworthy, occurring amid a backdrop of significant ETF outflows, illustrating a more cautious stance among certain investors.

Data gathered by Farside shows that Grayscale’s GBTC experienced the largest net outflows, amounting to $121 million. In close succession were ARK Invest’s ARKB with $65.5 million and Bitwise’s BITB with $11.7 million in outflows.

Other notable outflows included Fidelity’s FBTC at $7.4 million and VanEck’s HODL at $3.8 million. Meanwhile, BlackRock’s IBIT recorded no activity on Tuesday. The recent wave of outflows brings an end to a 19-day streak of net inflows for the 11 spot Bitcoin ETFs in the US, with outflows totaling nearly $65 million the previous day.

Bitcoin Buoyant on Positive CPI Data

Lower-than-expected inflation figures are anticipated to further buoy the crypto market, which has been trading within a narrow range for several weeks. In May, the CPI remained largely unchanged, surpassing the previously estimated 0.1% increase and declining from April’s 0.3%. Annually, the CPI rose by 3.3%, slightly below both forecasts and April’s 3.4%.

The recent price movements and the increase in retail long positions suggest that Bitcoin had already priced in the latest CPI figures and the impending Fed decisions.

As highlighted by IREN board member Mike Alfred, Bitcoin is considered a “highly intelligent global macro asset,” capable of anticipating and factoring in major economic developments well in advance of official releases.

Charlie Bilello, Chief Market Strategist at Creative Planning, tweeted,

“Overall, US CPI fell to 3.27% year-over-year in May from 3.36% in April. US inflation has now been above 3% for 38 consecutive months. US Core CPI (excluding Food and Energy) dipped to 3.41% year-over-year from 3.62% last month. This marks the lowest core inflation reading since April 2021.”

Conclusion

Overall, the recent surge in Bitcoin and Ethereum prices, coupled with positive CPI data, creates a cautiously optimistic outlook among retail investors. With significant long positions on Binance and ongoing ETF outflows, the crypto market remains on high alert, awaiting further insights from the FOMC meeting. Investors should stay tuned for the unfolding developments, as the decisions made could set the tone for the market’s direction in the coming weeks.