Bitcoin, Ethereum, and Dogecoin Experience Small Gains After May CPI Data Release
Major cryptocurrencies traded slightly higher on Tuesday following the announcement of better-than-expected inflation figures. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose by 4% in May, slightly lower than the projected 4.1% and April’s figure of 4.9%. Bitcoin briefly showed signs of optimism but remained stagnant below $26,000. Additionally, altcoins such as Injective, BNB, and Fantom experienced gains of over 7%.
The global crypto market capitalization increased by 0.30% over the last day, reaching $1.06 trillion. Stocks also soared following the release of the inflation data, with investors optimistic that the Federal Reserve may hold off on interest rate hikes. The S&P 500 and Nasdaq Composite closed at their highest levels since April 2022.
Analysts have mixed views on the future of cryptocurrencies. Edward Moya, Senior Market Analyst at OANDA, highlighted the risk of cryptocurrencies being deemed securities, which could impact crypto interest in the US. On the other hand, crypto analyst Michael Van de Poppe predicts a market drop but sees a potentially lucrative trading opportunity in the $24,500 to $25,000 range. Chris Burniske, a partner at venture capital firm Placeholder, believes that doubt about the future of crypto is natural and can lead to significant gains over time.
Meanwhile, on-chain analytics platform Santiment reported that the exchange supply of Bitcoin reached its lowest level since February 2018. Traders are moving their BTC holdings to self-custody wallets amid uncertainty surrounding major crypto exchanges Binance and Coinbase, which are facing lawsuits from the SEC. This trend is expected to continue as the lawsuits unfold.
Overall, major cryptocurrencies saw slight gains after the release of the inflation data, but the market remains cautious due to ongoing regulatory concerns and uncertainty surrounding the future of cryptocurrencies.