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Driven by unexpectedly positive U.S. Consumer Price Index (CPI) figures, Bitcoin experienced a 1.6% rise in the 13:30 (BST) 30-minute candle, closing at $28,197.
This movement was supported by significant trading volume, breaking a four-day downturn for the leading cryptocurrency.
Source: BTCUSD on TradingView.com
Broader macroeconomic factors contribute to Bitcoin uncertainty
After dropping below $30,000 on April 17, BTC found support at $27,000 on April 24.
Since then, it has fluctuated between $27,280 and $30,050, with both extremes demonstrating robust support and resistance, as indicated by multiple interactions at these levels.
Following a rejection at the $29,940 resistance on May 6, BTC recorded consecutive red daily candles over a four-day span, resulting in an 8% decline during this period.
The prevailing macroeconomic discussion centers on the $31 trillion debt ceiling and the potential for a U.S. default if a bipartisan agreement is not reached.
Treasury Secretary Janet Yellen cautioned that the administration will deplete its funds by June 1 if a resolution is not achieved.
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In the meantime, the Federal Reserve’s rate hike strategy appears to be yielding the intended results, at least in relation to month-over-month expectations.
On May 3, the central bank increased rates by 25 basis points, elevating the Federal Funds Rate to 5.00% – 5.25%. The upcoming FOMC meeting will conclude on June 14, with markets currently showing an 87% probability of no rate hike, likely reflecting the ongoing banking vulnerabilities observed in recent weeks.
CPI data
CPI increased by 4.9% in April, falling short of the anticipated 5% rate.
However, Core CPI rose by 0.4% in April, aligning with expectations for a 0.4% increase. This brings the year-over-year Core CPI to 5.5%, unchanged from April of the previous year.
Similar to CPI, Core CPI also monitors the prices of goods and services but differs by excluding food and energy prices, which are considered too volatile for inclusion. Central banks utilize Core CPI, rather than CPI, to guide policy decisions.
Throughout this period of uncertainty, Bitcoin has remained resilient, even displaying brief indications of safe haven characteristics during the banking crisis.
For the time being, all attention is directed towards June 14 as the market anticipates the Fed’s evaluation, with many hoping for a pause that could lead to a shift in policy.
The post Bitcoin halts four day slide as CPI comes in better than expected appeared first on CryptoSlate.
