Bitcoin rose to its highest price in ten months on April 11 as traders and investors wait for April 12’s Consumer Price Index report. If the report shows inflation dropping, it could be the next possible catalyst that will help Bitcoin continue its rally. On Tuesday, Bitcoin’s price soared 6.5% to over $30,220 after a relatively calm Easter weekend. Moreover, these gains came alongside a drop in US stocks, indicating a rare decoupling highlighting Bitcoin’s safe haven characteristics similar to gold.
Bitcoin Rallies Before Consumer Price Index Report
On April 12, the Bureau of Labor Statistics will release its March statistics for Consumer Price Index (CPI) data. Industry experts predict that the report will show inflation going down to 5.1% year-over-year from the previous 6%. The price of Bitcoin rising over $30,000 suggests that crypto traders have been betting on a drop in inflation, which could be a pivot for the US economy. However, the US Dollar Index is up around 0.7%, indicating that large investors expect a rate hike ahead. There is a 70% probability of the Federal Reserves lifting its rates by 25 basis points after its meeting in May. This could result from a tightening labor market that enables the Fed to continue raising lending rates in the future.
Bitcoin Market Outlook
After topping $30,000 in June last year, Bitcoin plummeted below $20,000, where it spent most parts of 2022 and into the first weeks of 2023. The top cryptocurrency surged in January amid signs of upcoming inflation. While the price action was relatively dormant in February, Bitcoin regained its momentum in late March after the failure of the Silicon Valley Bank (SVB) and Signature Bank. With investors questioning the stability of the current monetary system, Bitcoin came on top as a safe haven asset to hedge against financial instabilities.
With cautious investors measuring the impact of the latest US banking crisis, increasing inflationary pressure, and other macroeconomic uncertainties, Bitcoin’s price has been hovering around the $28,000 mark for the last three weeks. As March’s banking crisis fades further into the distance, investors are growing more optimistic about the Fed’s monetary policies. As a result, Bitcoin has smashed through the $30,000 psychological barrier for the first time since June 10, 2022. At the time of writing, Bitcoin is trading at $30,200, up almost 6.5% over the last 24 hours. Bitcoin is up about 80% year to date after starting 2023 at around $16,000.
Can Bitcoin Hit $40,000 in May?
Data from popular price index sites suggest that Bitcoin is prepared to hit $40,000 ahead of the Fed FOMC. But the likelihood of holding that price point would depend on the inflation data. From a technical analysis standpoint, Bitcoin must close above its weekly resistance range of $32,000 for a guaranteed run toward $40,000. Historically, this price point has served as support in several sessions of 2021 and 2022.
According to crypto analyst CrediBULL Crypto, the ongoing Bitcoin rally will end between $30,000 and $40,000. Furthermore, he added that this will give everyone around six months to accumulate Bitcoin before the price heads up for a new all-time high in 2024 or 2025 if the halving cycle repeats. This data is supported by the Gate.io BTC price prediction engine, hinting towards a high $30,000 by the end of this run.
Meanwhile, other analysts are not so bullish as they claim that Bitcoin’s ongoing rally results from Tether printing more USDT. One claimed that Bitcoin’s price is artificially rising because Tether is printing billions of USDT out of nothing. While the claim is a bit extreme, Tether has indeed injected $14 billion into its circulating supply so far in 2023. However, there is a decline in USDC and BUSD supplies, indicating that the total stablecoin market capitalization is lower than last year’s.
In case of a pullback from the $29,500 range, Bitcoin risks falling toward its 50-week EMA near $25,250 and its 200-week EMA near $25,000.
Crypto-Related Stocks Surge With Bitcoin
As Bitcoin amassed some gains on Tuesday, increasing over 6.4% to $30,160, crypto-related stocks have also skyrocketed. Due to their close relationship with Bitcoin, these crypto-related stocks suffered with BTC’s price plunging over the past months. However, the latest improvements in Bitcoin’s price performance have helped these companies rebound to some extent.
Crypto exchange Coinbase (COIN) is up 7.6% and is currently trading at around $66.13. Also, the company continued a positive streak of 1.9% in extended trading sessions. And in the last three months, it achieved almost 99% growth. Similarly, Marathon Digital (MARA) and MicroStrategy (MSTR) have also advanced with the Bitcoin price surge. Marathon Digital is up by 12% and has grown over 70% over the past month. On the other hand, MicroStrategy, which has over 140,000 Bitcoins to its name, went up by 7%.
Other crypto-related stocks that went up with Bitcoin include fellow Bitcoin Miners, Riot Platform (RIOT), and Hut 8 Mining (HUT). The Riot Platform is ahead by 15.5% and has grown nearly 150% in the past three months. Meanwhile, Hut 8 Mining is up by 9.5%.
Conclusion
While 2020 to 2021 is perceived as a breakthrough moment for Bitcoin and other digital assets, the present economic scenario has made Bitcoin ascend onto the global stage as a formidable asset. Amid extreme geopolitical instability, a failing banking system, and increasing concerns for reserved currencies, Bitcoin has become a safe haven for many investors. Masses of new users flocked to popular crypto exchanges like Gate.io to buy BTC, which is now being preserved until new highs. Also, it is remarkable that Bitcoin has continued to push higher amid the biggest regulatory crackdown on the crypto industry in the US. Recent events have reinforced the premise that a single country can not suppress Bitcoin, making it a truly global asset.