NIX Solutions: Bitcoin’s Surge Amid Consumer Price Data

The dynamics of changes in the cryptocurrency market are becoming increasingly similar to fluctuations in the stock market. Amid news of a lower-than-expected US consumer price index, the price of Bitcoin (BTC) jumped on Wednesday, along with stocks in exchange trading. The price of BTC rose more than 7% to $66,124.59, reaching its highest level since March 25, according to Coin Metrics.

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Impact of Consumer Price Index on Bitcoin

Additionally, the price of Bitcoin surpassed the 50-day moving average for the first time since April 13. The U.S. Department of Labor’s Bureau of Labor Statistics reported on Wednesday that the consumer price index has increased by 0.3% since March, slightly below the Dow Jones Industrial Average’s forecast for a 0.4% rise. Consumer prices have continued to rise by 3.4% compared to last year. “As the core U.S. CPI declines for the first time in six months, we could see a return to investor interest in risk assets such as cryptocurrencies, leading to increased inflows into spot Bitcoin ETFs,” said Leena ElDeeb, analyst at 21Shares.

Bitcoin’s Position and Future Outlook

Bitcoin has a unique position as both a risk-on and risk-off asset, Leena noted, and many investors are pursuing a long-term strategy for the crypto asset. While the US Federal Reserve’s policy may cause Bitcoin volatility in the short term, it will not fundamentally change the cryptocurrency’s long-term trajectory, adds NIX Solutions. With Wednesday’s surge, Bitcoin is up 8.92% for the week – its best week since March 29 – and is on track to reverse a six-week decline. We’ll keep you updated on further developments as they unfold.