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- Core CPI inflation decreases to 4.8% from 5.3% in May, marking the lowest rate since November 2021.
- With inflation declining more rapidly than anticipated, analysts predict BTC will reach $35k.
As reported by the U.S. Bureau of Labor Statistics, the inflation rate based on the annual change in the Consumer Price Index (CPI) was 3% in June, surpassing market forecasts of 3.1%. Additionally, Core CPI inflation has decreased to 4.8% from 5.3% in May, the lowest level recorded since November 2021. This development enables the Federal Reserve to adopt a more cautious approach regarding monetary policy.
Should headline inflation fall to 3%, investors may anticipate further increases in both the stock and cryptocurrency markets. Analysts at JPMorgan have suggested that inflation will be lower than previously expected, compelling the Federal Reserve to take a more measured stance.
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All Eyes on Upcoming Interest Rate Hike
Projections from the CME FedWatch Tool following the CPI data release indicate a 90% likelihood of a 25 basis points increase at the FOMC meeting scheduled for July 26. The US dollar index (DXY) reached a low of 101.16, its lowest point in two months, and is expected to continue its decline. This trend is likely to support Bitcoin’s upward movement above $31,000.
Furthermore, following a swift rise of over 1% in the minutes after the CPI data was released, Bitcoin’s price has once again targeted levels above $31,000. As inflation has decreased more quickly than expected, analysts believe BTC’s value could rise to $35k. However, a certain level of uncertainty is anticipated.
Ethereum’s price has risen by 1% over the past day, trading above $1900 according to data from CMC. Following the significant increase, the prices of Bitcoin and Ethereum have surpassed critical thresholds.
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