Bitcoin broke $28k as positive CPI propelled the cryptocurrency market


  • The recent slowdown in inflation has led to a rally in the cryptocurrency market.
  • Bitcoin broke the $28,000 mark, and Ethereum followed closely.
  • Although food prices have fallen, core inflation remains high.

With the changing American economic landscape, Crypto Dealers Monitor the Consumer Price Index (CPI) closely. This headline inflation number has major implications for Federal Reserve policy, affecting the entire crypto market.

in April, Inflation has slowed For the tenth consecutive month, according to data released by the Bureau of Labor Statistics on Wednesday, May 10th.

Bitcoin crashes $28k on CPI numbers

The news of slowing inflation created positive momentum in the cryptocurrency markets. Bitcoin, often a leading indicator for the crypto market, broke the $28,000 mark on this news.

This bullish trend was not limited to Bitcoin alone. Several tokens have seen a significant increase, painting the market green over the past 24 hours. Ethereumthe second largest cryptocurrency market cap, rose beyond $1,880, closely following Bitcoin’s lead.

The market reaction is likely due to the correlation between inflation numbers and Fed policy. Specifically, when inflation is high, the Fed has to rein it in by raising interest rates. However, higher interest rates are driving down the value of risky assets, which includes cryptocurrencies.

Core inflation remains high

This slowdown in CPI inflation was mainly due to lower grocery costs which offset higher gasoline prices. Despite this, a measure of core inflation, known as core inflation, has remained high.

Core CPI, which excludes volatile food and energy items, rose 0.4% from March, reversing a similar rise in the previous month. As a result, the annual inflation figures fell only slightly, from 5.6% to 5.5%.

Total consumer prices rose 4.9% from a year earlier, down from 5% in March and a significant drop from a 40-year high of 9.1% in June. On a monthly basis, prices rose 0.4% after a 0.1% increase in March. This annual increase is the smallest since April 2021.

on the flip side

  • Bitcoin extremists They argue that bitcoin is a store of value and a hedge against inflation. However, the markets still treat Bitcoin as a risk asset, which makes it highly correlated with other cryptocurrencies.
  • The Fed recently approved a 25 basis point increaseand raised the federal funds rate to its highest level in 16 years.

Why should you bother

Macroeconomic decisions have major implications for cryptocurrency markets, just as they do for traditional markets. Interest rates and the cost of borrowing have a significant impact on cryptocurrency in general Market value.

Read more about how the latest price hikes are affecting the cryptocurrency market:

Here’s how the recent Fed rate hike will affect cryptocurrencies

Read about the latest developments in the first cryptocurrency insider trading case:

Coinbase Exec Convicted in Crypto Firm’s First US Insider Trading Case


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