Bitcoin (BTC) will need to see a slowdown in United States inflation when the results are released next month if it wants to surpass its all-time highs reached in March, according to a crypto analyst.
Markus Thielen, the head researcher at 10x Research, stated in a report on May 29 that if inflation prints at 3.3% or lower, Bitcoin should make a new all-time high. The United States Bureau of Labor Statistics (BLS) is set to release the Consumer Price Index (CPI) results on June 12.
This represents a 0.1 percentage point decrease from the previous CPI result, which was 3.4% on May 15. Thielen believes that in the two weeks leading up to the release of the May CPI results, spot Bitcoin exchange-traded funds (ETF) inflows will remain strong in anticipation.
However, if the CPI results turn out to be higher than expected, momentum could weaken, as seen earlier this year.
Over the past two weeks, spot Bitcoin ETF inflows tracked by Farside data have been positive day-on-day, with the highest day of total inflows on May 21 at $305.7 million.
According to Thielen, there are no random moves in Bitcoin’s price; it all comes down to critical drivers, with inflation being its main driver. There have been several instances this year when Bitcoin’s price declined following higher-than-expected CPI results.
On April 10, the CPI was printed at 3.5%, just 0.1% higher than expected. A few weeks later on April 30, Bitcoin’s price dropped 6.67% to $56,000.
Thielen also noted that when spot Bitcoin ETFs launched on January 11, despite $611 million in inflows on the first day, the rest of January’s inflows were disappointing. He claimed that the main reason for this was that the CPI results printed higher than expected.
“It is no coincidence that Bitcoin was weak in January and stronger into March but consolidated for two months,” he added.
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