Markets
Crypto Market Rebounds on Weak CPI Data
Crypto markets surged on June 12 after US CPI figures for May remained stable, fueling expectations of promising inflation data.
U.S. Consumer Price Index (CPI) data remained unchanged last month, down from 0.3% in April. The year-on-year (year-over-year) CPI also fell, from 3.4% in April to 3.3% in May, beating expectations that the data would remain the same.
Year-on-year core CPI levels fell from 3.6% to 3.4% last month, the lowest rate since April 2021. The general consensus estimates a point of 3.5% for this index .
Following the improvement in data, the total crypto market capitalization increased by 3% to $2.65 trillion, per CoinGecko. Bitcoin (BTC) broke a two-day red streak with a 4% rise, surpassing $69,300, while Ethereum (ETH) rose almost 3% to $3,639 at the time of writing.
Other digital assets ranked in the top 10 tokens, like BNBSolana (GROUND), XRPDogecoin (DOGE), and Toncoin (TONNE), also posted modest gains on the day.
Top 10 Digital Assets Jump on CPI Data | Source: CoinGecko
Lower inflation data could support crypto prices
A QCP capital report suggested that crypto traders and investors are expecting colder inflation data at the upcoming Federal Open Market Committee (FOMC) meeting.
The company noted “aggressive buying” on the June 13 calls and an increase in financing rates, indicating market positioning for an upward move.
“A neutral outcome from the FOMC could push the crypto market to retest its highs once again,” analysts at QCP Capital said.
Cryptocurrencies and risk assets could see liquidity inflows if the Fed mirrors the decisions of other umbrella banks. Recently, the European Central Bank and the Bank of Canada have cut rates. The US Dollar Index (DXY) hit a 30-day high following this news, meaning more capital became available for investment.