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Bitcoin Hits $66,000 as Weak Inflation Data Triggers Crypto Rally
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BTC rose to its highest price since April 24, while Solana’s SOL and NEAR led the cryptocurrencies’ gains.
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Bitcoin could target the $84,000 level with altcoins performing well, Swissblock said.
Cryptocurrency markets experienced a weaker-than-expected rally on Wednesday American inflation data shook digital assets out of their stupor.
Bitcoin {{BTC}} rose above $66,000 for the first time since April 24, and recently surged more than 7% in the past 24 hours. Ether {{ETH}} changed hands near $3,000, but underperformed with an advance of 4% during the same period.
Solana {{SOL}} and near {{NEAR}} led gains among the crypto majors with jumps of 8% and 12%, respectively, and the broader market benchmark CoinDesk 20 Index (CD20) increased by 6%.
The rally occurred as US consumer price index (CPI) data for April fell from March, along with a slightly lackluster retail sales report. The data came as a relief to investors who feared that reaccelerating inflation and a red-hot economy could force the Federal Reserve to review its accommodative approach and even consider raising interest rates.
“Investors view this as a bullish regime shift, as it marks the first decline in CPI inflation in the past three months,” Bitfinex analysts said in a market update. This, coupled with the fact that the Federal Reserve had previously announced its intention to reduce central bank balance sheet outflow, “is seen as a favorable outcome for risky assets,” Bitfinex added.
Looking at traditional markets, US stocks also rose on the day, with the S&P 500 index gaining more than 1% and hitting a new all-time high, underlining the return of risk appetite.
Bitcoin’s surge today also marked the break of a downtrend that has capped prices in recent weeks, Swissblock analysts said in a Telegram update.
“BTC [is] we finally make the bigger move,” Swissblock said. “We are waiting for the trigger to release a larger structure from the March high. Today we figured it out,” referring to CPI and retail sales numbers.
Bitcoin has broken out of a downtrend that limited prices during previous rallies. (Swissblock/TradingView)
The analyst firm said the breakout paves the way for BTC to rally first to $69,000, then potentially to new all-time highs targeting the $84,000 price level. During the next step, “altcoins will follow strongly,” the report adds.