Bitcoin Price Forecast as US Core Inflation Data Releases – Is the Bull Market About to Begin?

Last updated: May 15, 2024 8:57 pm EDT | 3 minutes reading

Bitcoin Price Prediction

Bitcoin price rose 7.50% to $66,350 amid the latest US inflation data release. The US consumer price index (CPI) increased 0.3% in April, compared to 0.4% in March and February.

This lower than expected increase suggests that inflation is resuming its downward trend, reinforcing financial market expectations for a potential interest rate cut by the Federal Reserve in September.

CPI data and its economic implications

O IPC data It is significant because it indicates the cooling of inflation, which is a positive sign for the economy. The slower rise in consumer prices is in line with other data showing that retail sales remained stable in April, further suggesting a slowdown in domestic demand.

This cooling demand is good news for Federal Reserve officials who want to achieve a “soft landing” for the economy without triggering a recession.

Main drivers of inflation: shelter and gasoline costs

Housing costs, including rent, rose 0.4% for the third month in a row, and gasoline prices rose 2.8%. These two categories accounted for more than 70% of the CPI increase. In contrast, food prices remained unchanged, with notable reductions in supermarket prices for items such as eggs, which fell by 7.3%.

Year-on-year, the CPI increased by 3.4% in April, slightly lower than the 3.5% in March. This annual increase has slowed significantly from a peak of 9.1% in June 2022. Economists predicted that the CPI would increase by 0 .4% month-on-month and 3.4% year-on-year, indicating that inflation is moderating.

FOMC’s dovish stance weakens DXY; Raising the price of Bitcoin

Chairman of the Federal Reserve Jerome Powell stated that although inflation is falling slowly, he expects it to continue falling toward the Fed’s 2% target. Financial markets now forecast a roughly 73% probability of a rate cut in September, up from 69% before of data dissemination. Some economists even anticipate that the Fed could begin reducing borrowing costs as early as July.

The Fed has maintained its benchmark interest rate in the range between 5.25% and 5.50% since July, following a series of rate hikes totaling 525 basis points since March 2022.

Expectations of a rate cut had a positive impact on stock markets, with Wall Street trading higher, the dollar weakening against other currencies and US Treasury prices rising. This economic environment has fueled the recovery in Bitcoin prices as investors look for alternative assets amid changes in monetary policies.

Bitcoin Price Prediction

Bitcoin is currently trading at $66,350, up 7.50%, in line with an uptrend Bitcoin Price Prediction. The 4-hour chart shows a strong bullish recovery as Bitcoin breaks out of a symmetrical triangle pattern around the $63,300 level.

This breakout is confirmed by two significant bullish candles, indicating robust upward momentum.

However, caution is needed as recent candlestick formations including Doji and spinning tops around the $66,200 level suggest potential market indecision. These patterns, along with an overbought RSI of 78, could signal an upcoming bearish correction.

Bitcoin Price: Top Trading Levels

Key price levels to watch include the pivot point at $65,150, which serves as a crucial support level. Immediate resistance is found at $67,300, with additional resistance at $68,545 and $70,000.

On the downside, immediate support is at $63,300, followed by $61,560 and $60,185. The 50-day exponential moving average (EMA) at $62,565 also provides critical support, reinforcing the uptrend.

Bitcoin Price Prediction – Source: Tradingview

If Bitcoin fails to sustain its upward trajectory, a pullback to the pivot point at $65,150 is likely, with further declines potentially reaching $63,300. The overbought RSI suggests that a bearish correction could be imminent.

Conclusion: The overall outlook for Bitcoin remains bullish above the $65,150 midpoint. However, a break below this level could trigger a sharp selling trend, targeting immediate support at $63,300.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You can lose all your capital.

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