Bitcoin Surges to $66K, Could Eye $84K on Inflation News

Bitcoin surpasses $66K, rallying with crypto markets on soft U.S. inflation data and dovish Federal Reserve signals.

By Bill Bullington

5/15, 16:27 EDT
Bitcoin / U.S. dollar

Key Takeaway

  • Bitcoin surpasses $66,000, rallying over 7% in 24 hours following softer-than-expected U.S. inflation data and sluggish retail sales.
  • Solana and Near lead major crypto gains with 8% and 12% increases, respectively; overall CoinDesk 20 Index up by 6%.
  • Analysts predict BTC's breakout could lead to a rally towards $69,000 and potentially new highs around $84,000 as altcoins follow suit.

Crypto Markets Surge on Inflation Data

The crypto markets experienced a significant rally following the release of softer-than-expected U.S. inflation data for April. Bitcoin (BTC) led the charge, breaking past the $66,000 mark for the first time since April 24, showcasing a robust increase of over 7% in the last 24 hours. Ether (ETH), while also advancing, saw a more modest increase of 4%, trading near the $3,000 level. Notably, Solana (SOL) and Near Protocol (NEAR) outperformed among the major cryptocurrencies, with gains of 8% and 12%, respectively. The CoinDesk 20 Index (CD20), a benchmark for the broader market, was up by 6%, indicating a widespread positive sentiment across digital assets.

Inflation and Federal Reserve's Stance

The rally was primarily fueled by the April U.S. Consumer Price Index (CPI) figures, which showed a decrease from March's numbers, coupled with a slightly sluggish retail sales report. This data provided relief to investors who had been concerned about reaccelerating inflation and a potentially overheating economy prompting the Federal Reserve to reconsider its dovish position or even contemplate interest rate hikes. Bitfinex analysts highlighted, "Investors consider this as a bullish regime shift, as it marks the first decrease in CPI inflation over the last three months." The Federal Reserve's previous announcement of its intention to taper the central bank's balance sheet run-off was also seen as a favorable factor for risk assets.

Traditional Markets and Bitcoin's Breakout

The positive reaction to the inflation data was not limited to the crypto markets. U.S. equities also saw gains, with the S&P 500 index climbing more than 1% and reaching a new all-time high, indicating a resurgence of risk appetite among investors. Swissblock analysts pointed out that Bitcoin's surge marked a significant breakout from a downtrend that had capped prices for the last few weeks. They suggested that the CPI and retail sales numbers served as a trigger for this breakout, potentially opening the path for Bitcoin to rally towards $69,000 and possibly even new all-time highs around the $84,000 price level.

Street Views

  • Bitfinex Analysts (Bullish on digital assets):

    "Investors consider this as a bullish regime shift, as it marks the first decrease in CPI inflation over the last three months... is seen as a favorable print for risk assets."

  • Swissblock Analysts (Bullish on BTC):

    "BTC [is] finally making the bigger move... We have been waiting for the trigger for the release of a larger structure since March high. Today we got that." "The breakout opens the way for BTC to rally $69,000 first, then later potentially towards new all-time highs targeting the $84,000 price level. During the next leg up, 'altcoins will follow strongly.'"