Analyst: Bitcoin Prices Soar Triggered By US Inflation Data Release In Accordance With Market Expectations

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JAKARTA - Crypto Analyst Reku Fahmi Almuttaqin assessed that the price of Bitcoin, which again touched the level of US$66 thousand for the first time since April 24, 2024, was triggered by the release of US inflation data according to market expectations.

"The development of inflation in April, which is better than expectations, has succeeded in pushing the price of Bitcoin up to a level above 66 thousand US dollars or 7.3 percent of the lowest price of the last 24 hours at the level of 61.6 thousand US dollars," Fahmi said in his official statement in Jakarta, quoted from Antara, Thursday, May 16.

The US Consumer Price Index (CPI) in April 2024 on an annual basis was at 3.4 percent, down from the March 2024 figure of 3.5 percent.

On Thursday morning, the price of Bitcoin skyrocketed above the level of 66 US dollars. The increase in Bitcoin was followed by the greenness of a number of other crypto assets such as Ethereum which jumped 4.62 percent to the level of 3,017 US dollars.

Then, Solana was also appreciated for being 12.22 percent equivalent to 160 US dollars and NEAR Protocol up 18.39 percent to 7.24 US dollars.

The increase in crypto assets is also in line with what happened in the US stock market with indexes such as S&P 500, Nasdaq, and DJIA, which are compactly green after the release of US inflation data.

Fahmi assessed that the return of the trend of inflation in a positive direction after March's data that was higher than expected could potentially be a pretty good supporting catalyst for the crypto market in the next month.

Moreover, this is the first time CPI has subsided so far this year after it rose to 3.2 percent from 3.1 percent in January, and rose back to 3.5 percent in March.

"The development of the existing situation with the increasing adoption of crypto as by institutional investors in the United States, for example, could potentially trigger a significant reversal of market direction," he said.

In a situation like today, according to Fahmi, CPI data has a more dominant role in the dynamics of the crypto market.

This was reflected in last month, where the March CPI data had exerted significant pressure on the market in the past month.

"The current rise in the crypto market also highlights investor optimism for the possibility of lowering interest rates at the end of the third quarter or fourth quarter of this year. However, the dynamics of future economic data is still a determining variable that investors need to anticipate," he said.

Under current conditions, Fahmi said crypto investors can take advantage of it with a number of strategies. One of them is a narrative hopping strategy where investors can look for certain narratives that are in great demand by the market to then make profit-taking and move to other narratives that have the potential to be in great demand.

In addition, the dollar cost-averaging (DCA) strategy is equally attractive, especially for investors who do not have much time to keep up with market developments and map out existing narratives.

With DCA's strategy, explained Fahmi, investors make regular purchases every certain period with a certain nominal value so that they can provide attractive average price investors while waiting for the trend of lower interest rates. The average purchase price now does not need to be calculated manually.

"Because investors can monitor it in the Investment Insight feature available in Reku. In addition, investors can also monitor period holdings, profit/loss calendars, to the accumulation of profits from all portfolios. That way, investors can be more informed about their investment performance and more confident in making decisions," said Fahmi.