May 16 2024: Bitcoin’s price surged on Thursday, reaching $65,844, driven by a weaker dollar following softer consumer inflation data for April. Despite this rise, the cryptocurrency continues to trade within a stable range as overall market sentiment remains muted.
Over the past 24 hours, Bitcoin saw a 6.4% increase, peaking at $66,600 before losing some momentum. This recovery comes after the token had dipped to $60,000 earlier in the week.
Bitcoin Price Boosted by Weaker Dollar Post-CPI Data
Bitcoin’s midweek rebound was primarily due to a drop in the dollar, which hit one-month lows after April’s consumer price index (CPI) data showed slower-than-expected growth. Headline CPI grew at a slower rate, while core CPI eased as expected. This data, coupled with weaker-than-expected retail sales figures, fueled hopes that inflation may ease in the coming months, potentially allowing the Federal Reserve to consider lowering interest rates.
However, inflation remains well above the Fed’s 2% annual target. Several Fed officials have recently emphasized that more substantial evidence of easing inflation is needed before considering rate cuts. This cautious stance has limited significant gains in Bitcoin, keeping it within the $60,000 to $70,000 trading range observed over the past two months.
Despite an increased risk appetite reflected in Wall Street’s record highs, this enthusiasm has not fully extended to the crypto markets. Concerns about potential regulatory headwinds also weigh on sentiment, especially amid reports of increased regulatory actions by the Securities and Exchange Commission against the sector. Additionally, capital flows and trading activity in spot exchange-traded funds, which had driven Bitcoin’s rally in March, have largely stagnated recently.
Altcoins See Gains but Struggle to Maintain Momentum
Major altcoins also experienced sharp gains on Thursday, though most remain below the highs achieved in March, when they benefited from Bitcoin’s rally. Ethereum, the world’s second-largest cryptocurrency, rose by 3.4%, while XRP increased by 3.6%. Solana outperformed with a 12.3% rise, reaching an over one-month high, but it still lags behind its 2024 peaks.
