Bitcoin Spot Volume Sparks Market Euphoria, CPI Data Brings it Back Down

Bitcoin’s price has taken a tumble after CPI data spotlighted hot US inflation, but will we see new BTC all-time highs in after April’s Bitcoin Halving event?

2024 is the year BTC strapped on jet-packs with the explosive launch of US spot Bitcoin ETFs in January fuelling the asset’s rise to new all-time high ahead of the Halving event.

But, with the Federal Reserve’s latest revelation that CPI data (consumer price index inflation) is still running hot, the question remains whether BTC will see all-time highs in April, or whether markets will have to wait until May.

(BTCUSDT)

The flow of Bitcoin in and out of exchanges has seen a substantial uptick since July 2023. Indeed, daily exchange flows have soared to $8.19 billion, surpassing the peak levels of the previous bull market.

Core inflation remained hot at +3.8% YoY in March, potentially delaying rate cut decisions anticipated by financial markets.

With that said, here’s a Bitcoin outlook for the rest of the year.

April’s Bitcoin Halving Event: How High Will BTC Go?

March witnessed a realized profit taken of 1.8% across the crypto markets, indicating that a significant portion of the total market cap was secured as profit over a seven-day period. This level of profit-taking matches the peak of 2021, underscoring the strength of the current market phase.

Blackrock and Fidelity have stacked 416,000 #Bitcoin with zero days of outflows. Zero.

The people buying aren't Binance & FTX Traders from 2021. They're not looking for a chance to sell.

This is Buy, Hold & Buy More. pic.twitter.com/BHa9iY6NE3

— Thomas | heyapollo.com (@thomas_fahrer) April 10, 2024

The current market dynamics suggest a fresh influx of capital into Bitcoin. The share of wealth held by coins younger than six months has sharply increased, marking a significant shift in investor demographics and hinting at the growing influence of new market participants.

Despite the palpable excitement and bullish indicators, the road ahead is challenging.

In 2020, the bull run did not kick off on the Halving Day itself.  Just a day after the Halving, Bitcoin plummeted by -40%.

This suggests after the Halving, the Fear and Greed Index may cause a “sell the news” phase before a bull run begins.

Yet, rest assured, as we wrote last week – the supply shock introduced by the event will take effect with time – and bullish investors expect BTC to reach $200k by 2025.

Why Is Bitcoin Price Down Today: CPI Data Versus Bitcoin Halving

After the CPI bomb dropped in March, Bitcoin staggered, shedding $1,000 and slinking back to $68,000.

Earlier Today, the CPI data for All Urban Consumers (CPI-U) lurched forward by 0.4 percent, outpacing analysts’ estimates.

(BLS)

With inflation clinging on investors are worried Federal Rate cuts will be pushed back from the estimated month of September.

Meanwhile, the dollar index (DXY), flexing like a heavyweight in the ring, soared past the 104 mark, sending a chill down the spine of risk-takers everywhere who typically invest in cryptocurrencies and tech stocks.

(DXY)

Bottom Line: Will Bitcoin Halving Send BTC to New Highs?

Despite these outflows and the immediate market reaction to the CPI data, it’s essential to remember that past performance doesn’t necessarily predict future movements.

Bitcoin’s resilience in bouncing back from $64,000 to $72,000 last week demonstrates the market’s volatility and difficulty forecasting short-term directions.

As investors parse through these mixed signals—ranging from Bitcoin prices, unexpected inflation data, and fluctuating ETF flows—the coming days for Bitcoin price will be historic.