Bitcoin reached over $64,000 on May 15 as U.S. core inflation dropped to the lowest level in three years, buoying optimism about potential interest rate cuts by the Federal Reserve.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin saw a spike to $64,700 following the Wall Street open, influenced by the latest U.S. Consumer Price Index (CPI) figures, which were better than expected, contributing to a positive shift in risk asset markets. Both the S&P 500 and Nasdaq Composite Index reached record highs following the news.
The CPI for April increased by 0.3% month-on-month, slightly below the anticipated 0.4%, with other key figures aligning with forecasts, showcasing a drop in core inflation to levels not seen since 2021. This development supports the possibility of the Fed implementing interest rate reductions.
Despite the positive indicators, not all reactions were optimistic. The Kobeissi Letter noted on X, “This is the first reduction in CPI inflation in the past three months. However, yesterday’s Producer Price Index (PPI) data indicated a third consecutive monthly increase, suggesting the Federal Reserve might adopt a ‘wait and see’ approach.”
Federal Reserve Chair Jerome Powell described the PPI data as “mixed” rather than alarming, in comments reported by Reuters, maintaining a generally dovish stance.
Market expectations for immediate rate cuts remained low, with CME Group’s FedWatch Tool indicating only a 3.1% probability of a cut in June and a 28.3% chance in July.
In the Bitcoin market, the CPI news prompted significant activity, with liquidity on exchange order books adjusting sharply in response. CoinGlass data indicated a surge in price activity, forming a new resistance level around $65,000.
Commenting on the market dynamics, prominent trader Skew noted on X that spot buyers must continue to apply pressure and aim to reclaim the 200-period exponential moving average as support on four-hour charts, which currently stands at $63,195. Skew emphasized that for market confidence to fully return, Bitcoin would need to convincingly break above the $65,000 mark.