Altcoins
Bitcoin and Altcoins Rise as US CPI Remains Stable in May
Core CPI, excluding food and energy prices, also calmed to 0.2% in May from 0.3% in April, with annual figures falling to 3.4% from 3. 6%.
The US Consumer Price Index (CPI) remained unchanged for the month of May, contrary to economists’ forecasts of a 0.1% increase. This is down from the 0.3% increase recorded in April. From one year to the next, the CPI increased by 3.3%slightly lower than the expected 3.4%.
Likewise, the core CPI, which excludes food and energy price volatility, cooled to 0.2% in May from 0.3% in April. On an annual basis, the core CPI fell to 3.4% from 3.6% the previous month. These figures indicate a significant slowdown in inflation, which has generated optimism in financial markets.
The next meeting of the US Federal Reserve later today will be crucial as it decides whether to maintain or reduce current interest rates. Earlier in the year, market expectations called for multiple rate cuts in 2024. However, these expectations have changed, with the first cut now expected in September, according to the CME FedWatch Tool.
The unexpected CPI numbers had a positive impact on market sentiment. Following the good employment figures in the United States published last week, investors’ appetite for risk has increased.
Rise in the Bitcoin and cryptocurrencies market
The cryptocurrency market reacted quickly to the CPI announcement. Before its release, Bitcoin had fallen to $66,000 as investors withdrew $200 million from ETFs in anticipation of the CPI announcement and subsequent Federal Open Market Committee (FOMC) meeting.
However, the release of CPI data led to a rapid recovery in Bitcoin price. In a few minutes, Bitcoin surpassed $69,000marking a significant rebound from its previous low.
Additionally, open interest in Bitcoin futures increased by 2.29%, reaching 523.38 thousand BTC or $36.37 billion, according to CoinGlass data.
The positive sentiment extended beyond Bitcoin, with altcoins seeing notable rallies. Ethereum price increased by almost 3%, reaching $3,635, while Solana saw an increase of around 5%, trading at $160.
The CPI data also led to gains of 6% and 4% for notable memecoins such as DOGE and SHIBA.