Bitcoin (BTC) surges on positive inflation data

Inflation data has come in lower than expected and markets are surging across the board. In the crypto market, $BTC is up nearly 4% over the last couple of hours as it approaches $70,000.

Better than expected inflation data

There’s nothing like a better than expected inflation figure to lend impetus to a Bitcoin bounce. According to Reuters, prices rose only 3.3% in the year to the end of May, down 0.1% from April’s figure. Core inflation rose by 0.2%, but this was better than economists’ expected 0.3%.

On this news, the Nasdaq Composite Index is up 1.8%, and the S&P 500 is up 1.3%. Of course, this is small beer where crypto is concerned, and Bitcoin is making hay, up nearly 4% in a short period of time.

Bitcoin surges to top of bull flag

Source: TradingView

Looking at the relatively short term time frame of the 4-hourly, it can be seen that $BTC has reached the top of its bull flag upper trend line once again. Having been rejected from this line half a dozen times already, except for a couple of short-lived breakouts above, the chances of breaking through are increasing.

Federal Reserve Chairman’s hire wire act

However, with Federal Reserve Chairman Jerome Powell’s speech at the end of today’s FOMC meeting still to come, there is still the risk that a bucket of cold water might be thrown onto markets.

The Federal Reserve’s hire wire balancing act has to be continued, and Chairman Jerome Powell, trapeze artist extraordinaire, may tend towards the hawkish in his speech, so as not to let markets get carried away and risk an increase in inflation for next month.

If on the other hand Powell errs on the dovish side and delivers an upbeat speech that promises rate cuts by the end of the year, this could be a double whammy that sends Bitcoin skyrocketing.

Nevertheless, this all remains to be seen later today, and in the meantime the crypto market can enjoy the perhaps unexpected gains of the last few hours. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.