As an experienced financial analyst, I believe that the latest surge in Bitcoin and Ethereum prices following the release of the US Consumer Price Index (CPI) data is a significant development in the cryptocurrency market. The shift in retail investor sentiment, as evidenced by the increase in net long positions on Binance, is particularly noteworthy.
The cryptocurrency market, including Bitcoin, saw a significant rise in value after the recent unveiling of the newest US Consumer Price Index (CPI) figures. Attention is currently focused on tonight’s Federal Open Market Committee (FOMC) meeting, which could potentially influence the market further.
As a crypto investor, I’ve observed some positive price movements recently. Bitcoin added 3.4% to its value in the last 24 hours, while Ethereum saw a gain of 2.43%. The market remains volatile, with Bitcoin hovering around $70,000 and Ethereum trying to break through the $4,000 barrier. However, there’s a palpable change in investor sentiment, particularly among retail traders on Binance.
Retail Investors’ Long Positions
Based on Hyblock’s newest data, approximately 70.25% of Binance accounts currently hold more Bitcoin than they previously purchased, representing a noticeable rise from the 57% reported within the past day. This trend indicates that many retail investors are actively trying to purchase at lower prices, expressing faith in Bitcoin’s potential recovery before the upcoming FOMC meeting.
Although we’ve experienced significant losses, retail investors remain optimistic about Bitcoin on Binance. Approximately 70.25% of trading accounts now hold more BTC than they sold, compared to only 57% in the previous 24 hours. In simpler terms, these investors continue to purchase Bitcoin with the hope of buying at a lower price.
As a researcher observing market trends, I’ve noticed an intriguing development: retail investors have become more cautious in their behaviors, evidenced by certain actions. Simultaneously, Exchange-Traded Funds (ETFs) have experienced outflows. This dual phenomenon suggests that investors are being prudent and exercising caution before making significant investments.
According to Farside’s data analysis, Grayscale’s GBTC experienced the most significant withdrawal of funds totaling $121 million. ARK Invest’s ARKB followed suit with $65.5 million in withdrawals, and Bitwise’s BITB recorded $11.7 million in outflows.
Following suit were Fidelity’s FBTC and VanEck’s HODL, which reported outflows of $7.4 million and $3.8 million respectively on Tuesday. In contrast, BlackRock’s IBIT saw no activity during this period. Collectively, these withdrawals marked the end of a 19-day streak where Bitcoin ETFs in the US experienced net inflows, resulting in approximately $65 million in outflows the previous day.
Bitcoin Bullish on Optimistic CPI
Expectations are high that a decrease in inflation rates will stimulate the cryptocurrency market, which has been experiencing price fluctuations within a narrow range for some time. In May, the Consumer Price Index (CPI) exhibited little change compared to the anticipated 0.1% rise and registered a decline from April’s 0.3% growth. On an annual basis, the CPI showed an increase of 3.3%, falling slightly short of both projections and the previous month’s 3.4% rise.
“The current Bitcoin price trend and the prevalent retail long positions might indicate that the cryptocurrency has already factored in the most recent Consumer Price Index figures and the forthcoming Federal Reserve decision.”
According to IREN board member Mike Alfred’s explanation, Bitcoin functions as a savvy global investment asset, often forecasting and integrating significant economic trends before they become publicly known.
Charlie Bilello, the Chief Market Strategist at Creative Planning, tweeted,
The annual rate of US Consumer Price Index (CPI) decreased to 3.27% in May compared to 3.36% in the previous month. The US has experienced inflation above the 3% mark for an uninterrupted 38-month period. Meanwhile, the Core CPI, which excludes food and energy costs, also saw a decrease, going from 3.62% year-on-year to 3.41%. This is the lowest reading for core inflation since April of last year.
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2024-06-12 18:54