The cryptocurrency markets experienced a surge on June 12th following the release of the U.S. Consumer Price Index (CPI) data for May, which showed no change. This led to optimism regarding future inflation figures.
In May, the CPI remained flat, a decrease from the 0.3% increase seen in April. Additionally, the year-over-year (YoY) CPI dropped from 3.4% in April to 3.3% in May, surpassing expectations of no change in the data.
Core CPI YoY levels also decreased from 3.6% to 3.4% last month, marking the lowest rate since April 2021. The consensus forecast had predicted a 3.5% rate for this index.
Following the positive data, the total market capitalization of cryptocurrencies rose by 3% to $2.65 trillion, as reported by CoinGecko. Bitcoin (BTC) saw a 4% increase, breaking a two-day downward trend and surpassing $69,300. Ethereum (ETH) also saw a nearly 3% increase, reaching $3,639 at the time of writing.
Other top 10 digital assets, such as BNB, Solana (SOL), XRP, Dogecoin (DOGE), and Toncoin (TON), also experienced modest gains on the day.
A recent report by QCP Capital suggested that traders and investors in the crypto market were expecting milder inflation data from the upcoming Federal Open Market Committee (FOMC) meeting. The firm observed increased buying activity of June 13 calls and rising funding rates, indicating a bullish market sentiment.
If the FOMC makes a neutral decision, it could lead to a retesting of the crypto market’s previous highs, according to analysts at QCP Capital. With other central banks, such as the European Central Bank and the Bank of Canada, cutting rates, there could be an influx of liquidity into cryptocurrencies and other risk assets. The U.S. dollar index (DXY) reached a 30-day high following this news, potentially making more capital available for investments.
In related news, Bitcoin ETF outflows reached $200 million ahead of crucial Fed inflation data.