Bitcoin (BTC), which saw a brief rise on April 12, after the United States recorded its highest Consumer Price Index data (CPI) since 1981, saw a brief rebound.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
nalyst – Inflation echos “mythical tales”
Cointelegraph Markets Pro and TradingView data showed that Bitcoin/USD spiked $400 as soon as it was released.
According to the U.S. Bureau of Labor Statistics, the CPI increased 8.5% year-over-year and increased 1.2% in March.
This was the highest level of inflation in more than 40 years. The results showed the inflationary pressures that were active throughout the economy, and suggested that the Federal Reserve still had a lot to go. The Fed was criticized everywhere, even by traditional economists like Steve Hanke.
Gabor Gurbacs (director of digital assets strategy at VanEck) responded, “U.S. CPI came out at *8.5%* level which means that inflation likely already in double digits.”
These numbers were once mythical stories that were associated with Venezuelan, Zimbabwean, and Argentina. The central banks have failed. It is time to plan BTC.”
Bitcoin’s response was in line to correlated stock markets, with the S&P 500 also gaining 1% on open markets and Asian markets recovering after previous losses.
MicroStategy CEO Michael Saylor said, echoing Gurbacs, “Inflation can be worse than you think” and that Bitcoin is more secure than you realize.
Chart of U.S. CPI trends. Source: U.S. Bureau of Labor Statistics
Is RSI going to deliver again for bulls?
Some analysts were still hopeful despite the fact that BTC/USD lost $40,000 overnight support.
Related: BTC stock correlation ‘not the we want’ — 5 things you should know about Bitcoin this week
One of these was Bitcoin’s relative strengths index (RSI), which is now being considered as a pretext for a possible trend turnaround.
Popular Twitter account BTCfuel pointed out that RSI returned to a reading 35 this week.
#BITCOIN MEGAPUMP SOON If you look at the RSI, 2022 Bitcoin correction looks very similar to 2021. Strong BULLISH move imminent pic.twitter.com/blmLVCxVRc
— BTCfuel (@BTCfuel) April 12, 2022
Cointelegraph reported that BTC price predictions saw a drop to $30,000 in June due to the macro picture.
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