Bitcoin price has been hovering around its highest level since June 6, 2022, for the past two days as investors digest the latest US Consumer Price Index (CPI) reading. At press time, BTC was trading slightly lower at $29,989 after hitting an intraday high of $30,486. Bitcoin, the largest cryptocurrency by market cap, has staged a significant recovery since the start of the year, jumping 81.33% in the year to date.

Economic Sentiment

Bitcoin price has staged a strong comeback this year, recently flipping the crucial resistance level of $30,000, hitting its highest level in 10 months. However, the digital asset was trading lower on Wednesday as markets chewed on the latest US CPI reading.

Data by the Bureau of Labor Statistics show that the Consumer Price Index rose 0.1% in March, down from 0.4% in February and below analysts’ expectations of a 0.2% gain. Over the last 12 months, the CPI increased by 5.0%, down from 6.0% in February and below the 5.2% increase expected by analysts.

The decline in the key inflation data has raised hopes that the Federal Reserve could hit a pause or put an end on its interest rate hike cycle soon. Contrary to market expectations, crypto prices fell off the back of the inflation data. Statistics by Coinmarketcap show that the global crypto market cap has slipped 0.64% to $1.23 trillion over the last day, while the total crypto market volume fell by 7.38%.

The US dollar also dropped sharply against the backdrop of a cooling inflation and hopes of a dovish Fed. The US Treasury yields also dropped on Wednesday with the 10-year Treasury yield falling to 3.406% and the 2-year Treasury plunging to 4.00%.

Focus has now shifted to the Federal Open Market Committee (FOMC)latest monetary policy meeting minutes slated for later today. With the decline in the latest CPI reading, markets expect the Federal Reserve to stall or end its interest rate hike sooner-than-expected.

Bitcoin Price Analysis

Bitcoin price has been moving higher for the past few days, climbing more than 6% in the past week. As I had predicted here, a move past the key level of $28,945.30 will have Bitcoin cruising past the $30k level.

On the daily chart, the digital asset has managed to remain above the 25-week and 50-week moving averages, as well as the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) is at 69, pointing to increased buying pressure. The Moving Average Convergence Divergence (MACD) indicator has remained bullish.

Therefore, dovish hints by the Fed will steer the Bitcoin price higher as buyers eye the next resistance level at $33,116. However, a move below the important support level at $28,945.30 will invalidate the bullish thesis.

BTC Price Chart