Bitcoin bulls, get ready for a ride! A crucial factor could determine whether the king of cryptocurrency reaches for the stars or stumbles – the upcoming US inflation data (CPI) on June 12th.

The Inflation Oracle Speaks: Lower Numbers, Higher Hopes

Markus Thielen, the analyst who foresaw Bitcoin's pre-halving boom, believes a magic number holds the key: a CPI reading of 3.3% or lower. According to his research, this could propel Bitcoin to a new all-time high, surpassing the record set in March.

Why Inflation Matters to Bitcoin

While Bitcoin's price movements may appear erratic, Thielen argues that fundamental factors are secretly pulling the strings. Inflation is a major influencer, and the upcoming CPI release is a critical event for Bitcoin investors.

Lower Inflation = Happy Bitcoin?

Think of inflation as a weight on the economy. If the June CPI shows inflation slowing down (ideally to 3.3% or less), it could signal an optimistic outlook. This could, in turn, empower Bitcoin to break past its previous highs.

History Repeats Itself: When Inflation Surprised, Bitcoin Slid

But here's the catch: higher-than-expected inflation readings have historically dampened Bitcoin's momentum. Remember April? A mere 0.1% increase in inflation (to 3.5%) caused Bitcoin's price to plummet by 6.67%.

The CPI-Bitcoin Price Dance: A Delicate Tango

This April incident highlights how even slight fluctuations in inflation can significantly impact Bitcoin. Lower inflation data is crucial because it bolsters the possibility of the Federal Reserve easing interest rates later this year.

Lower Rates = More Bitcoin Love?

Lower interest rates could stimulate the economy, potentially leading investors to increase their Bitcoin holdings. This could, in turn, drive the price upwards.

Spot Bitcoin ETFs: Riding the CPI Wave?

Thielen predicts strong inflows into spot Bitcoin ETFs (exchange-traded funds) leading up to the CPI release. This optimism aligns with recent trends, with several Bitcoin ETFs experiencing a surge in inflows after a period of stagnation.

A Cautionary Tale: January's Disappointing Inflows

However, Thielen warns against getting too excited. When spot Bitcoin ETFs debuted in January, despite a strong opening day, inflows remained subdued throughout the rest of the month. What triggered this? You guessed it – higher-than-expected inflation data.

The Verdict: Buckle Up for a CPI Rollercoaster

The upcoming CPI release is poised to be a pivotal moment for Bitcoin. Will it usher in a new era of record highs, or will it deflate investor confidence? Only time, and the magic number 3.3%, will tell. So, buckle up, Bitcoiners, because this June could be a wild ride!