10x Research Head Researcher Markus Thielen, the analyst who predicted the pre-halving Bitcoin all-time high, cited a June CPI reading of ‘3.3% or lower’ on May 30 as critical for a new all-time high.
According to Thielen’s insights in a 10x Research report, while Bitcoin price movements might “appear random,” they are actually influenced by fundamental factors.
Thielen cited inflation as the main driver, noting the importance of the US Bureau of Labor Statistics (BLS) releasing the CPI results on June 12.
He believes that for Bitcoin to consider surpassing its all-time highs reached in March, it will need to see a slowdown in US inflation in the upcoming results.
“If inflation prints 3.3% or lower, Bitcoin should make a new all-time high,” he said.
This represents a 0.1% decrease from the previous CPI result of 3.4% on May 15.
What Happens If We Don’t See Lower CPI Readings?
Thielen believes that if the CPI reading is higher than expected, it may have the opposite effect, weakening Bitcoin’s momentum.
There have been several instances throughout this year when Bitcoin’s price declined following higher-than-expected CPI results.
On April 10, the CPI was reported at 3.5%, just 0.1% higher than anticipated. Shortly after, Bitcoin’s price experienced a major decline, dropping 6.67% to $56,000 on April 30.
In contrast, on May 15, Bitcoin surged more than 5% to $65,000 following a CPI decrease. The CPI dropped to 3.4%, just 0.1% lower than anticipated, which propelled Bitcoin’s price.
This demonstrates how even a slight increase in the CPI can negatively impact Bitcoin’s momentum. CPI is important because it supports the prospect that the Federal Reserve will be able to ease interest rates later this year.
The CME FedWatch Tool shows that the market predicts the Federal Reserve will likely maintain the current interest rates soon.
Over 52% of traders expect at least one rate cut by September, however, expressing confidence in an easing.
This would break the economy’s current slowed state, allowing volume to flow into assets like Bitcoin and investors to increase their position.
Will This Affect ETF Inflows?
Thielen believes that spot Bitcoin exchange-traded funds (ETF) inflows will “remain strong” in anticipation of the June CPI results’ release.
This has proven true as multiple Bitcoin ETFs saw major inflows, breaking out of the consistent low flows in recent weeks.
According to Farside data, inflows have been positive daily since May 13, peaking at $305.7 million on May 21.
Thielen noted that when spot Bitcoin ETFs launched on Jan 11, despite $611 million in inflows on the first day, the rest of January’s inflows were disappointing.
He claimed that the main reason for this was that CPI results printed higher than expected – 3.4%, instead of the expected 3.2% and higher than the 3.1% recorded in the previous month.
“It is no coincidence that Bitcoin was weak in January and stronger into March but consolidated for two months,” he said.
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