The latest release of the US Consumer Price Index (CPI) data sparked a notable surge in Bitcoin and the broader cryptocurrency market. Bitcoin and Ethereum saw gains of 3.4% and 2.43% respectively over the past 24 hours. Despite the uncertainty in the crypto market, with Bitcoin hovering around $70,000 and Ethereum struggling to break $4,000, investors are cautiously optimistic.
A shift in market sentiment has been observed, particularly among retail traders on Binance. According to Hyblock’s latest research, 70.25% of accounts on Binance are holding net long positions on Bitcoin, a significant increase from 57% just 24 hours ago. This indicates that retail investors are increasingly confident in a potential rebound, as they look to “buy the bottom” ahead of the Federal Open Market Committee (FOMC) meeting.
ETF Outflows and Investor Caution
It is worth noting that this growing confidence from retail investors comes amidst ETF outflows, reflecting overall investor caution. Grayscale’s GBTC recorded the largest net outflows of $121 million, followed by ARK Invest’s ARKB with $65.5 million, and Bitwise’s BITB with $11.7 million. Other ETFs like Fidelity’s FBTC and VanEck’s HODL also experienced outflows. These outflows ended the streak of 19 consecutive days of net inflows for the 11 Bitcoin ETFs in the US.
Lower inflation figures, such as the CPI data remaining unchanged in May, are expected to provide a boost to the crypto market, which has been range-bound in recent weeks. The annual CPI increase of 3.3% was slightly below predictions. This recent price movement, coupled with retail investors’ long positions, suggests that Bitcoin may have already priced in the CPI data and the forthcoming Fed decision.
Bitcoin’s behavior as a “highly intelligent global macro asset” has been noted by industry experts. Mike Alfred, a board member of IREN, stated that Bitcoin has the potential to anticipate and integrate major economic factors well in advance of their release. The Chief Market Strategist at Creative Planning, Charlie Bilello, highlighted the US CPI moving down to 3.27% year-on-year in May from 3.36% in April, with inflation remaining above 3% for 38 consecutive months.
The recent surge in Bitcoin and the broader cryptocurrency market following the CPI data release highlights the growing optimism among retail investors. Despite the caution exhibited by ETF outflows, the anticipation of lower inflation figures and the potential impact of the upcoming FOMC meeting have instilled confidence in market participants. Bitcoin’s role as a leading indicator of economic trends further underscores its significance in the global financial landscape.