Markets
Cryptocurrency market recovers based on soft CPI data
Crypto markets jumped on June 12 after US CPI numbers for May were flat, fueling expectations of promising inflation data.
US Consumer Price Index (CPI) data was unchanged last month, down from 0.3% in April. The annual (annual) CPI also fell from 3.4% in April to 3.3% in May, beating predictions that the data would remain the same.
Year-over-year CPI core levels fell from 3.6% to 3.4% last month, the lowest rate since April 2021. The general consensus estimated a point of 3.5% for this index.
Following the improved data, the total crypto market value grew 3% to reach $2.65 trillion, per CoinGecko. Bitcoin (Bitcoin) broke a two-day red streak with a 4% increase, jumping above $69,300, while Ethereum (ETH) is up nearly 3% to $3,639 at the time of writing.
Other digital assets ranked in the top 10 tokens such as BNBSolana (SUN), XRPDogecoin (DOGE) and Toncoin (TONNE), also posted modest gains on the day.
Top 10 Digital Assets Jump on CPI Data | Source: CoinGecko
Softer inflation data could boost cryptocurrency prices
A Capital QCP report suggested that crypto traders and investors anticipated cooler inflation data at the upcoming Federal Open Market Committee (FOMC) meeting.
The company noted “aggressive buying” in the June 13 call options and raised funding rates, indicating the market positioning for an upward move.
“A neutral outcome from the FOMC could push the crypto market to retest its highs,” said analysts at QCP Capital.
Cryptocurrencies and risk assets could see liquidity inflows if the Fed reflects the decisions of other leading banks. Recently, the European Central Bank and Bank of Canada cut rates. The US dollar index (DXY) rose to a 30-day high following the news, meaning more capital became available for investment.