Alpari Market Analysis

Daily Market Analysis and Forex News

BTC displays caution as the markets are getting ready for US CPI release.

BTC displays caution as the markets are getting ready for US CPI release.

Crypto investors are being cautious ahead of the release of US inflation figures.

Higher than expected inflation may contribute to the Fed's potential decision to keep interest rates higher for longer. High interest rates can have a negative impact on riskier assets, including crypto.

For now, bitcoin bulls are trying hard to keep the current price above yesterday's close at ~$61,158.83.

During yesterday's speech, Fed Chairman Jerome Powell stated that "it may take longer than expected" for higher interest rates to bring down inflation.

Despite the recent uptick in unemployment (3.9% actual vs. 3.8% consensus), no indication was given as to whether this could contribute to earlier rate cuts.

However, he did mention that the rate hike is unlikely. Currently, the markets are pricing in an 80.1% chance of a rate cut in September.

Despite the pressure from the market's uncertainty about the Fed's future moves, BTC Spot ETFs are showing resilience in terms of funds flows. On Monday, May 13, total net inflows reached $66 million.

A new, potentially bitcoin-friendly appointment of the new CEO at Vanguard may have extended some level of support for BTC.

Salim Ramij, Vanguard’s new chief executive officer, previously oversaw the launch of BlackRock’s spot BTC ETF.

While there are no specific plans to launch similar products at the moment, the firm may potentially change its opposition stance to crypto.

Vanguard – is one of the world’s largest asset managers with over 50 million clients and total AUM reaching over $8 trillion.


From a technical perspective …

BTC is in a consolidation pattern with 21- and 100-period SMAs acting as immediate resistance/targets for bitcoin bulls.

On the downside, the psychological level of $60,000 will provide support in case the BTC bears try to regain the initiative.

The Relative Strength Index (RSI) is floating in neutral territory, highlighting the current state of uncertainty in the market as investors await the release of U.S. macroeconomic data later today.

On the upside, a break above the 21- or/and 100-period SMA may push the price higher towards the next key resistance level at the 50-period SMA. If this level is also taken, it could potentially open the doors to the all-time high again.

However, if the BTC bulls lose their grip and slide below the key psychological level of $60,000, it may signal a potential drop towards the $50,000 level. 



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