Bitcoin Hits $66K as Soft Inflation Data Sparks Crypto Rally

As an experienced analyst, I believe today’s crypto market rally is a significant bullish sign for digital assets. The softer-than-expected U.S. inflation data and positive retail sales report have provided much-needed relief to investors who were growing increasingly concerned about reaccelerating inflation and the potential for the Federal Reserve to tighten monetary policy.

The cryptocurrency markets experienced a surge on Wednesday due to unexpectedly lower-than-anticipated U.S. inflation figures, reinvigorating the sluggish digital asset sector.

Bitcoin’s price reached a new milestone of over $66,000 for the first time since late April, representing a substantial 7% increase in the last 24 hours. On the other hand, Ether saw less growth, trading around $3,000 while experiencing a comparatively modest 4% gain during the same period.

As an analyst, I’d interpret the recent economic data in this way: The decrease in the April U.S. Consumer Price Index (CPI) compared to March, along with a relatively weak retail sales report, brought some comfort to investors. These numbers eased concerns that surging inflation and a robust economy could potentially lead the Federal Reserve to reconsider its accommodative stance and even contemplate raising interest rates.

As a crypto investor, I would interpret this news in the following way: The recent decrease in Consumer Price Index (CPI) inflation for the past three months is considered by many investors as a sign of a bullish regime shift. This positive development, combined with the Federal Reserve’s earlier announcement about tapering its balance sheet run-off, makes this print favorable for risk assets like cryptocurrencies.

As a crypto investor, I’ve noticed an uptick in traditional markets today. The S&P 500 index surged by over 1%, reaching a new record high, indicating a strong rebound in investor confidence.

In their Telegram update, Swissblock analysts noted that today’s Bitcoin price increase signified a rupture of the recent downtrend which had kept costs suppressed for the past few weeks.

“Swissblock announced that Bitcoin is now making its significant advance, long-awaited since the March peak. This development was precipitated by recent key economic indicators including the CPI and retail sales figures.”

An analytics company predicted that Bitcoin‘s breakthrough could pave the way for a rally to reach $69,000 initially, and subsequently, it may surge toward new record highs of around $84,000. In the subsequent bullish phase, altcoins are expected to follow suit with notable gains.