US CPI Inflation Falls to 4.9%, Triggering Bitcoin Price Rise: Analysis and Insights

In April, the US Bureau of Labor Statistics reported that the annual US Consumer Price Index (CPI) inflation was 4.9%, which is lower than the expected 5%. The annual core inflation rate also dropped to 5.5% in April, down from 5.6% the previous month. Traders responded by anticipating that the US Federal Reserve will pause and reduce interest rates, causing the price of Bitcoin to start rising.

The CPI inflation rate rose by 0.4% in April, which is higher than the 0.1% increase seen in March but in line with market expectations. The energy index decreased by 5.1%, while the food index increased by 7.7%.

The fall in both the CPI and core inflation rate caused a market rally, with futures linked to US stock market indexes rising by almost 1% and the crypto market reversing losses. BTC and ETH prices also rose, with BTC trading above $28k and ETH above $1850.

The fall in the US Dollar Index to below 101.5o confirms a bullish momentum in Bitcoin to $30,000, with other cryptocurrencies likely to follow suit.