Bitcoin Soars to $66K Amid Soft Inflation, Igniting Crypto Rally

By Lars Weer Last updated May 15, 2024

Bitcoin reached its highest price since late April, with Solana’s SOL and NEAR leading gains in the cryptocurrency market.
According to Swissblock, Bitcoin has the potential to target the $84,000 mark as altcoins continue to perform well.

The cryptocurrency market saw a significant upswing on Wednesday, triggered by U.S. inflation data that was less severe than anticipated.

For the first time since April 24, Bitcoin (BTC) surpassed the $66,000 threshold, marking a notable increase of over 7% in the past 24 hours. Ether (ETH), however, showed a modest growth of 4%, trading near $3,000.

Among major cryptocurrencies, Solana (SOL) and NEAR Protocol (NEAR) led the bullish trend with impressive gains of 8% and 12%, respectively. The broader market, represented by the CoinDesk 20 Index (CD20), rose by 6%.

This market rally followed the release of the April U.S. Consumer Price Index (CPI), which indicated a slight drop from March’s figures, alongside a mildly underperforming retail sales report. The data eased investor concerns about rampant inflation and an overheated economy possibly prompting the Federal Reserve to reconsider its dovish stance and hike interest rates.

Bitfinex analysts commented on the situation, stating, “Investors are viewing this as a bullish shift since it’s the first dip in CPI inflation over the past three months.” They also noted that the Federal Reserve’s prior announcement to reduce its balance sheet runoff is perceived positively for risk assets.

In traditional markets, U.S. equities also experienced gains, with the S&P 500 index rising more than 1% and reaching a new all-time high, reflecting a resurgence in risk appetite.

Swissblock analysts highlighted that Bitcoin’s rally signified a breakthrough from a downtrend that had restricted its price movements in recent weeks, as communicated via a Telegram update.

“Bitcoin is finally making significant movements,” Swissblock noted. “We have been anticipating the trigger for a larger structural release since March’s high, and today’s CPI and retail sales data provided that catalyst.”

Bitcoin surged past a previously limiting downtrend, according to Swissblock analysts. (Swissblock/TradingView)

Swissblock’s analysis suggests that this breakout could first push Bitcoin to $69,000, with the potential to attain new all-time highs, aiming for the $84,000 level. They also predict that during this upward movement, altcoins will exhibit strong follow-through.