Bitcoin (BTC) will need to witness a deceleration in inflation rates in the United States in order to surpass its previous all-time highs achieved in March, according to a crypto analyst. Markus Thielen, the head researcher of 10x Research, stated that if inflation remains at 3.3% or lower, Bitcoin is likely to set a new record. Thielen made this prediction in a report released on May 29, ahead of the release of the Consumer Price Index (CPI) results by the United States Bureau of Labor Statistics (BLS) on June 12. He suggested that spot Bitcoin exchange-traded funds (ETF) inflows will remain strong in the two weeks leading up to the release of the CPI results. However, if the CPI results turn out to be higher than expected, Bitcoin’s momentum could weaken, as has been observed earlier this year.
Over the past two weeks, there has been a positive trend in spot Bitcoin ETF inflows, as tracked by Farside data. On May 21, the highest day of total inflows reached $305.7 million. Thielen emphasized that Bitcoin’s price movements are not random, but are driven by critical factors, with inflation being the main driver. He cited previous instances this year when Bitcoin’s price dropped following higher-than-anticipated CPI results. For example, on April 10, when the CPI was reported at 3.5% (0.1% higher than expected), Bitcoin’s price decreased by 6.67% to $56,000.
Thielen also discussed the launch of spot Bitcoin ETFs on January 11, noting that despite initial inflows of $611 million on the first day, the rest of January’s inflows were disappointing. He attributed this to the fact that the CPI results were higher than expected. In January, the CPI was recorded at 3.4%, surpassing the expected 3.2% and the previous month’s 3.1%. Thielen concluded that Bitcoin’s weakness in January and its subsequent strength in March, followed by a consolidation period for two months, were not mere coincidences.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.