Cryptocurrency market bounces back following release of mild CPI data
The cryptocurrency markets experienced a surge on June 12 after the release of flat U.S. CPI numbers for May, leading to expectations of positive inflation data.
In May, the U.S. Consumer Price Index (CPI) remained unchanged from the previous month, dropping from 0.3% in April. The year-over-year (YoY) CPI also decreased from 3.4% in April to 3.3% in May, surpassing predictions of no change in the data.
Core CPI YoY levels saw a decline from 3.6% to 3.4% in the past month, marking the lowest rate since April 2021. The general consensus had forecasted a 3.5% point for this index.
Following the release of this positive data, the total market capitalization of cryptocurrencies increased by 3% to reach $2.65 trillion, according to CoinGecko. Bitcoin (BTC) ended a two-day decline with a 4% jump, surpassing $69,300, while Ethereum (ETH) saw a nearly 3% increase to $3,639 at the time of reporting.
Other top 10 digital assets, including BNB, Solana (SOL), XRP, Dogecoin (DOGE), and Toncoin (TON), also experienced modest gains on the same day.
A report from QCP Capital suggested that crypto traders and investors were anticipating softer inflation data from the upcoming Federal Open Market Committee (FOMC) meeting. The firm observed “aggressive buying” of June 13 calls and rising funding rates, indicating market positioning for a potential upward movement.
QCP Capital analysts stated, “A neutral FOMC outcome could propel the crypto market to retest its highs once more.”
If the Federal Reserve follows the lead of other central banks, such as the European Central Bank and the Bank of Canada, by implementing rate cuts, cryptocurrencies and other risk assets could see liquidity inflows. Following this news, the U.S. dollar index (DXY) reached a 30-day high, suggesting that more capital may become available for investments.
To learn more, read about BTC ETF outflows reaching $200m ahead of critical Fed inflation data.
