Bitcoin, Ethereum Price Rises As US CPI Inflation Cools To 4.9%
The annual U.S. Consumer Price Index (CPI) inflation for April comes in at 4.9%, lower than the expected 5%, as per data by the US Bureau of Labor Statistics. Moreover, the annual core inflation rate drops to 5.5% in April after rising 5.6% last month. As a result, Bitcoin price has started rising as traders expect the US Federal Reserve will pause and move ahead to cut interest rates.
US Consumer Price Index (CPI) Falls To 4.9%
The CPI inflation rate increased to 4.9% in April, as compared to the market consensus of 5%. It is the lowest since April 2021. The annual inflation in March fell to 5%, indicating a possible Fed pivot in the coming months as inflation cooled. However, the US Fed raised interest rates by another 25 bps and increased risks for banks and the economy. The cooling inflation will the Fed a green signal to cut rates soon as the debt ceiling and banking crisis risks looming.
The energy index decreased by 5.1%, and the food index increased by 7.7%. Compared to the previous month, the CPI rose 0.4%, much higher than 0.1% in March but matching market expectations.
Meanwhile, the core inflation rate also fell to 5.5% in April from 5.6% in the prior month, matching market estimates. The fall in both CPI and core inflation rate led the market to rally higher, with futures linked to US stock market indexes rising almost 1% and the crypto market reverse losses.
Also Read: Binance, Coinbase Impacted As Jane Street, Jump Crypto Exit US Crypto Market
Bitcoin, Ethereum Price Rebounds
BTC price jumps after the annual U.S. CPI inflation rate falls to 4.9%. BTC price is currently trading above $28k, up 2% in the last 24 hours. Meanwhile, ETH price also rises above $1850, up 2% in the last 24 hours.
The broader crypto market has followed suit with major altcoins Cardano, XRP, Solana, Dogecoin prices rising higher.
With the CPI cooling in April, the U.S. Dollar Index (DXY) fell below 101.5o. The continuous fall, especially to 101, confirms a bullish momentum in Bitcoin to $30,000, with other cryptocurrencies including Ethereum to follow suit.
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