The release of softer-than-expected U.S. inflation data has ignited bullish sentiment for riskier assets, with Bitcoin (BTC) leading the way.
According to CoinDesk, Singapore-based QCP Capital said in a recent note to clients that favorable market conditions might push Bitcoin prices toward the $74,000 mark soon, driven by growing institutional demand.
The U.S. Consumer Price Index (CPI) rose by a modest 0.3% in April, below the 0.4% increase in March and the consensus forecast of 0.4%. This positive news triggered a significant breakout for Bitcoin, which reclaimed the $66,000 level for the first time since April, marking its most substantial single-day gain since March.
The U.S. Bureau of Labor Statistics announced yesterday that the Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.3 percent in April on a seasonally adjusted basis, following a 0.4 percent increase in March. Over the past 12 months, the all-items index has climbed 3.4 per cent before seasonal adjustment.
The CoinDesk article went on to say that traders at QCP Capital believe the combination of bullish momentum and increasing demand from traditional finance could see Bitcoin surpass its March record high of $73,700. The firm’s desk reported significant purchases of $100K-$120K BTC call options for December 2024, indicating strong bullish sentiment among investors:
“We expect bullish momentum here that could take us back to the highs of nearly $74,000,” QCP traders said. “The desk saw sizeable buyers of $100K-$120k BTC Calls for Dec 2024 on this move higher in spot.”
Alongside this bullish sentiment, some analysts have observed reduced selling pressure on Bitcoin, based on on-chain and exchange data. CryptoQuant analysts noted in a Thursday report that short-term Bitcoin holders are selling at nearly zero profit, with traders depleting their unrealized profits over the past few months. Moreover, the stabilization of Bitcoin balances at OTC desks suggests a decrease in the supply of Bitcoin entering the market for sale via these entities.
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