Following the release of the latest US Consumer Price Index (CPI) data, the cryptocurrency market saw a notable surge, with Bitcoin and Ethereum recording gains of 3.4% and 2.43% over the past 24 hours. Despite the uncertain market conditions, retail traders on crypto exchange Binance have shown a significant shift in sentiment. According to recent findings, 70.25% of accounts on Binance now hold net long positions on Bitcoin, indicating a strong belief in a potential rebound ahead of tonight’s Federal Open Market Committee (FOMC) meeting.
The behavior exhibited by retail investors comes amidst ETF outflows, highlighting investor caution in the market. Data from Farside revealed that Grayscale’s GBTC witnessed the largest net outflows amounting to $121 million, followed by ARK Invest’s ARKB with $65.5 million and Bitwise’s BITB with $11.7 million in outflows. Fidelity’s FBTC and VanEck’s HODL also experienced outflows, while BlackRock’s IBIT remained inactive. The recent wave of outflows ended a 19-day streak of net inflows for Bitcoin ETFs in the US, with total outflows reaching almost $65 million the day before.
Lower inflation figures are expected to further boost the crypto market, which has been range-bound for weeks. In May, the CPI remained essentially unchanged, slightly below predictions and April’s figures. The recent price movements and retail long positions may suggest that Bitcoin had already priced in the latest CPI data and the upcoming Fed decision. Industry experts like Mike Alfred describe Bitcoin as a “highly intelligent global macro asset” that anticipates and incorporates major economic factors well in advance.
Charlie Bilello, Chief Market Strategist at Creative Planning, shared his insights on US CPI data, noting that overall, US inflation has now been above 3% for 38 straight months. In May, the US CPI decreased to 3.27% year-on-year from 3.36% in April, while the Core CPI (ex-Food/Energy) also saw a slight decline from the previous month. These figures play a crucial role in shaping market expectations and investor behavior, particularly in the cryptocurrency space.
Retail investors’ increasing long positions on Bitcoin amidst ETF outflows and lower inflation figures reflect a cautious yet optimistic outlook on the crypto market. As market dynamics continue to evolve, it will be essential for investors to closely monitor key economic indicators and market trends to make informed decisions about their investment strategies.