Bitcoin Roars Back to $66K, Fueled by Cooling Inflation

Propelled by the deceleration of U.S. inflation, Bitcoin surged by 7% in April, reclaiming the $66,000 threshold. The domestic market also witnessed a rebound, with Bitcoin surpassing the 92 million won mark. Moreover, risky assets experienced a general upswing, as Bitcoin spot exchange-traded funds (ETFs) attracted substantial net inflows. Notably, Solana, an Ethereum alternative, outperformed Bitcoin with a double-digit increase rate, while Ethereum's recovery was comparatively subdued ahead of its spot ETF review.

Bitcoin Soars 7%, Recovering to $66,000 Level as US Inflation Cools

The cryptocurrency market witnessed a significant surge in April, with Bitcoin leading the charge, recovering its value to $66,000. This remarkable uptrend coincides with a slowdown in the US Consumer Price Index (CPI), injecting renewed confidence in riskier assets.

On the domestic front, Bitcoin reclaimed the 92 million won mark in South Korea, a testament to its robust performance. The positive momentum has also extended to Bitcoin spot exchange-traded funds (ETFs), which have expanded their net inflows, further bolstering the digital currency's appeal.

Among altcoins, Solana, a popular alternative to Ethereum, has garnered attention by recording a surge that doubled Bitcoin's growth rate. In contrast, Ethereum's rebound has fallen short of Bitcoin's, despite the approaching date for the review of its spot ETF application.

Altcoins Exhibit Varied Performances

Ethereum, whose spot ETFs submitted by US asset manager VanEck are slated for review on the 23rd, has exhibited a comparatively subdued rebound. The latest figures indicate a 4.06% rise in its value over the past 24 hours, trailing Bitcoin's 6.74% growth. Market consensus suggests that the Ethereum spot ETF may face challenges in gaining approval.

Solana, on the other hand, has surged 13.46%, demonstrating its resilience. Ripple, embroiled in an ongoing legal battle with the US Securities and Exchange Commission (SEC), has also exhibited a moderate increase of 3.20%. Dogecoin, a prominent meme coin, has registered a 7.15% gain.

Inflation Slowdown Fuels Sentiment

The rise in cryptocurrency prices on this trading day has been attributed to a slowdown in inflation indicators in the United States. The US Labor Department reported an increase of 0.3% in CPI over the previous month, slightly below market forecasts of 0.4%.

Year-over-year, CPI rose by 3.4% in April, decelerating from the previous month's 3.5%. Excluding volatile food and energy prices, the core CPI also eased its monthly increase to 0.3% and its annual gain to 3.6%.

Rate Cut Expectations Rise

The moderation in inflation indicators has fueled expectations for a rate cut by the US Federal Reserve (Fed). According to CME Group's FedWatch tool, the probability of a rate freeze in September now stands at 24.7%, while the probability of a 25 basis point cut has risen to 52.7%. Including the possibility of a rate cut exceeding 25 basis points, the likelihood of a rate cut in September has reached 75.3%.

Bitcoin ETFs Witness Net Inflows

Bitcoin spot ETFs have also experienced a surge in net inflows. Fidelity's FBTC saw an influx of $131.3 million on the 15th (local time), while Grayscale's GBTC, which had previously witnessed net outflows, received $27 million.

Despite the unavailability of data for BlackRock's IBIT, the overall fund flow of the nine ETFs is expected to continue with net inflows for three consecutive trading days. The scale of net inflow has also been on a gradual uptrend since the 13th.

Analysts Signal Bitcoin's Potential Low

Analysts have suggested that Bitcoin may have reached or is approaching its low point. According to CryptoQuant analyst maartunn, the surrender of miners is believed to have occurred on the 14th (local time).

Miner surrender refers to a situation where miners discontinue mining operations due to decreasing profitability. This occurs when the difficulty of mining increases after a halving event, leading miners to power off their mining equipment, thereby reducing mining computing power (hashrate).

The hash ribbon indicator, which captures trends in hashrate, has identified this point of miner surrender. Historically, such situations have often coincided with price lows. However, it is important to note that the low point may materialize days or weeks after the miner surrender signal is observed.