Bittime - The core consumer price index (CPI) data of the United States released on Monday, May 15, also influenced the price of Bitcoin (BTC) and other crypto assets. This index, which measures fundamental inflation in the US, saw a lower-than-expected increase in April.
Core CPI rose 0.3% from March, marking the first time in six months that there was a lower-than-expected increase.
These data signal a possible downside in the inflation trend, which raises expectations of future Federal Reserve interest rate cuts. Nonetheless, Fed officials still need more data before considering a rate cut.
On Sunday, Fed Chairman Jerome Powell said the central bank needs to be "patient and let restrictive policy work." In addition, some policymakers do not see any rate cuts happening this year.
Bitcoin cs Begins to Recover
News of this slowing inflation increases optimism in financial markets, including crypto. The price of Bitcoin (BTC) jumped from $62,000 (Rp912 million) to $66,000 (Rp970 million), an increase of about 7% in 24 hours.
Major altcoins also saw significant gains, with Ethereum (ETH) and Solana (SOL) rising by 4.4% and 12.3%, respectively. As a result, the overall cryptocurrency market capitalization rose by 6.7%, reaching $2.5 trillion (Rp36,750 trillion), according to data from CoinGecko.
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US Inflation Easing Affects Bitcoin
Analysts believe that factors other than the easing of US inflation also influenced Bitcoin's latest rally. Analysts from CryptoQuant identified that "lower selling pressure" contributed to the situation.
"Lower selling pressure is seen from short-term Bitcoin holders selling at near-zero profit rates and traders cutting back on their unrealized profits in recent months. In addition, Bitcoin balances at over-the-counter (OTC) tables are stable, which indicates that the supply of Bitcoin coming into the market for sale through these entities is diminishing," they told BeInCrypto.
However, demand growth needs to pick up for this rally to be sustainable. Despite signs of increased demand from long-term holders and large investors, the pace of growth still needs to accelerate. In addition, CryptoQuant analysts note that Bitcoin spot exchange-traded fund (ETF) purchases remain minimal, and stablecoin liquidity growth has not improved.
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Bitcoin Miners' Post-Halving Pressure
Further, the price of Bitcoin remains undervalued from the perspective of miners' profitability. After the Bitcoin halving event in late April 2024, miner rewards halved, putting financial pressure on them.
Historically, very low miner profitability has often been associated with price lows, indicating future growth potential. This financial stress is caused by the reduction in block rewards received by miners, which are now half of what they were before.
With revenue declining, miners need to be more efficient in their operations to remain profitable. However, the low profitability of these miners could be an indication that the market is nearing bottom, potentially leading to future price increases.
Analysts' View on the Future of the Crypto Market
While some analysts remain optimistic about the long-term prospects of Bitcoin and the crypto market in general, they also caution that a consistent increase in demand is essential to maintain an uptrend.
One of the key factors to watch is the growth of stablecoin liquidity, which currently still does not show a significant increase. Stablecoins are often used as a temporary store of value for investors waiting for an opportunity to re-enter the crypto market.
In addition, a successful launch of a Bitcoin spot ETF could provide a major boost to Bitcoin demand. This kind of ETF will allow institutional investors to gain exposure to Bitcoin without having to buy and hold the asset directly. With ETFs, it is expected that there will be an increase in demand from this market segment.
Bitcoin Price Today
Today, 16/05/2024, the price of Bitcoin is at the level of Rp1,054,805,124 per coin. BTC surged 5.74% in the past 24 hours, according to data from Bittime.
Conclusion
Although news of slowing US inflation provides a significant boost to the crypto market, the sustainability of this rally still depends on a number of factors. Consistent demand growth, increased stablecoin liquidity, and support from institutional investors through instruments such as ETFs will be key determinants of whether this optimism can hold.
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How to Buy Crypto on Bittime
You can buy and sell crypto assets in an easy and secure way through Bittime. Bittime is one of the best crypto applications in Indonesia that has been officially registered by Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. In addition, also make sure that you have enough balance by depositing some funds into the wallet. For your information, the minimum asset purchase at Bittime is IDR 10,000. After that, then you can make a crypto asset purchase in the application.
Learn the Complete Guide on How to Buy Crypto on Bittime.
Monitor the price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.
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