Bitcoin is poised to resume its upward trajectory as inflation eases, according to 10x Research, reports CoinDesk.
“Our recommendation remains unchanged: stick with the winners (Bitcoin) and avoid the others (Ethereum and others). Our previous analysis showed that a decline in the consumer price index typically leads to an increase in the price of the first cryptocurrency. We expect this trend to continue,” the report states.
According to analysts, a slowdown in inflation historically attracts a significant influx of funds into BTC-ETF.
They observed that inflows dried up following the December consumer price dynamics data, which weakened the case for a rate cut by the Fed.
The positive trend resumed in February ahead of the next inflation report for the previous month.
Since March 12, when updated figures were released, it was interrupted again due to the Fed’s shift towards a more conservative policy scenario, specialists added.
In June, it was reported that by the end of May, annual inflation in the US had slowed from 3.4% to 3.3%, marking the lowest level since April 2021. The macroeconomic data spurred a rise in Bitcoin, which increased by 2% in the first 15 minutes.
Later that day, a Fed meeting took place, the outcomes of which dampened risk appetite. The digital gold’s prices lost the gains accumulated after the CPI achievements.