April inflation cooling triggers market frenzy! Bitcoin surges over 7% in a single day, returning to $66,000

Zhitong Finance APP noticed that after the CPI in April showed a slight easing of inflation compared to March, Bitcoin rose on Wednesday along with the stock market.

Data shows that the price of this cryptocurrency has risen by more than 7%, reaching $66,312, making it Bitcoin's best day since March 25. The cryptocurrency broke above the 50-day moving average for the first time since April 13.

Analyst Owen Lau from Auburn Analytica said, "The CPI data slightly lower than expected slightly increased the possibility of a rate cut, which remains an important factor affecting Bitcoin prices." "After ETFs and halving, the next major catalyst is a rate cut. Until we see a clearer path to rate cuts, Bitcoin may continue to range and trade with macro data points."

The data released by the U.S. Bureau of Labor Statistics on Wednesday showed that the CPI rose by 0.3% month-on-month in April, slightly lower than the 0.4% predicted by Dow Jones. The CPI still rose by 3.4% compared to the same period last year.

Analyst Leena ElDeeb from 21Shares said, "With the first cooling of the U.S. core CPI in six months, we may see a revival of investor interest in risk assets such as cryptocurrencies, prompting more funds to flow into Bitcoin spot ETFs, especially calm over the past week."

She added, "Although the rate cut is still uncertain, the recovery may be slow." "Generally, higher interest rates reduce the attractiveness of risk assets such as tech stocks and Bitcoin, as investors can obtain substantial returns from safer options such as U.S. Treasury bonds."

ElDeeb explained that Bitcoin has a unique position as both a risk preference and a safe-haven asset, with many investors holding long-term views on crypto assets, and added that while Fed policy may cause short-term volatility in Bitcoin, it will not fundamentally alter Bitcoin's long-term trajectory.

Recently, Bitcoin has been more influenced by macro factors, such as the launch of Bitcoin ETFs and industry catalysts like the halving of Bitcoin prices in the rearview mirror. Earlier this week, Bitcoin also missed out on a two-day meme stock frenzy.

With Wednesday's rise, Bitcoin has risen by 8.92% this week, marking the best single-week gain since March 29 and potentially breaking a six-week downtrend.

Since March, Bitcoin has been trading between $60,000 and $70,000—fluctuating several times within this range, when Bitcoin rose to a historical high but quickly fell back. Investors and analysts have been expecting Bitcoin to range-bound in the coming months without strong catalysts