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Bitcoin Hits $66,000 as Soft Inflation Data Sparks Crypto Rally
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BTC soared to its highest price since April 24, while Solana’s SOL and NEAR led crypto gains.
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Bitcoin could target the $84,000 level with altcoins performing well, Swissblock said.
Crypto markets recovered on Wednesday, more gently than expected US inflation data brought digital assets out of their stupor.
Bitcoin {{BTC}} surpassed $66,000 for the first time since April 24 and was recently up more than 7% in the past 24 hours. Ether {{ETH}} changed hands near $3,000 but underperformed with a 4% gain over the same period.
Solana {{SOL}} and nearly {{NEAR}} led gains among crypto majors with jumps of 8% and 12%, respectively, and the broader market benchmark CoinDesk 20 Index (CD20) is up 6%.
The rebound came as April’s U.S. Consumer Price Index (CPI) figures were down slightly from March, coupled with a slightly flat retail sales report. The data came as a relief to investors who feared that reaccelerating inflation and a red-hot economy could force the Federal Reserve to reverse its dovish stance and even consider interest rate hikes.
“Investors view this as a bullish regime change as this is the first decline in CPI inflation in the last three months,” Bitfinex analysts said in a market update . This, combined with the fact that the Federal Reserve previously announced its intention to reduce the liquidation of the central bank’s balance sheet, “is considered a favorable number for risk assets,” Bitfinex added.
In traditional markets, US stocks also rose during the day, with the S&P 500 index gaining more than 1% and hitting a new all-time high, highlighting the return of risk appetite.
Bitcoin’s current rise also marked a break from a downward trend that had capped prices in recent weeks, Swissblock analysts said in a Telegram update.
“BTC [is] finally take a bigger step,” Swissblock said. “We are waiting for the trigger for the release of a larger structure from the March high. Today we got it,” referring to the CPI and retail sales numbers.
Bitcoin has broken out of a downtrend that capped prices during previous rallies. (Swissblock/TradingView)
The analytics firm said the breakout paves the way for BTC to first rally to $69,000 and then possibly towards new all-time highs targeting the $84,000 price level. During the next stage, “altcoins will follow strongly,” the report adds.