Shocked! Prices suddenly spike after the CPI data is released


Bitcoin prices have remained stable as investors have shrugged off inflation concerns, especially after the recent release of the US User Price Index (CPI). Market players were initially looking forward to the US CPI data, especially after recent US PPI data showed that inflation has risen more than expectations.

Meanwhile, inflationary pressures have so far affected investor sentiment, with expectations high on a possible hawkish stance by the Federal Reserve.

The latest data from the US Department of Labor showed that the US Consumer Price Index (CPI) increased by 0.3% in April, lower than the market expectation of 0.4%.

At the same time, the core CPI, excluding food and energy prices, increased by 0.3% month-on-month, in line with Wall Street estimates. On a YoY basis, Core CPI jumped by 3.6%, after increasing by 3.8% in the previous month.

Although inflation appears to be cooling, it still remains higher than the Fed's 2% target, which is affecting global investor sentiment. However, investors seem to be praising numbers that are better than expectations.

For context, the latest US PPI inflation data exceeded market expectations. Following that, Federal Reserve Chairman Jerome Powell reiterated the central bank's stance on their rate hike plan.

On Tuesday, Fed Chair Jerome Powell said that inflation remains high and taking that into account, the central bank may keep the interest rate unchanged for a long period. Obviously, inflationary pressures have caused a number of investors to split, triggering increased volatility in the market.

However, the latest CPI data appears to have provided some relief to investors, easing concerns about a more hawkish move by the Federal Reserve. According to the CME FedWatch Tool, there is a 96.9% chance that central banks will maintain current benefit levels at their meeting next June.

Meanwhile, after the CPI data, the US 10 Year Bond Yield fell 2.07% to $4.354, while the US Dollar Index shrank 0.42% to $104.455. However, despite the surge in PPI inflation data that has raised concerns and made investors focus on other data for the time being.

For context, Bitcoin price is up 3.48% at the time of writing and is trading at $63,394 after hitting a 24-hour high of $63,773.87 in the past 24 hours. The single-day trading volume for the leading cryptocurrency also jumped 8.77% to $27.82 billion.

Additionally, Bitcoin Futures Open Interest (OI) also increased 1.75% in the past four hours to 474.38K BTC or $30.25 billion, according to CoinGlass data. This reflects that investors are still taking their risks after the cooler inflation data.