Bitcoin's price has been highly responsive to changes in inflation data, specifically the Consumer Price Index (CPI), in relation to the previous month. This observation was made by 10x Research analyst Markus Thielen in a market report dated May 29. According to Thielen, when CPI is higher than expected, it tends to have a bearish effect on the cryptocurrency, whereas lower-than-expected CPI has a bullish impact.

Correlations with CPI Data

Furthermore, spot Bitcoin ETF inflows have closely followed CPI data releases, resuming or accelerating when CPI data indicates lower inflation compared to the previous month. An analysis of BTC price over the past six months against U.S. inflation data reveals that when CPI is higher, the asset tends to be bearish, and when the figure is lower than expected, it becomes bullish. Thielen advises traders who understand how Bitcoin reacts to CPI to trade in the opposite direction of the CPI change relative to the previous month.

Bitcoin ETF Inflows and Price Projections

The research predicts that Bitcoin ETF inflows will likely remain robust over the next two weeks leading up to the June 12 CPI data release, potentially pushing BTC to new all-time highs. The pricing model anticipated a slight decline when consensus expected another higher disappointing inflation print for May 15. Looking ahead to the next two months, the prediction is that inflation may hover around a similar level, with a downward bias soon occurring. If inflation prints 3.3% or lower, Bitcoin is expected to reach a new all-time high.

Inflation Outlook and Impact on Bitcoin

The analysis suggests that inflation is no longer a concern and will likely transform into a tailwind for Bitcoin as the summer progresses. U.S. inflation based on CPI data stood at 3.4% for April. Additionally, core personal consumption expenditures (PCE) price index data, the Federal Reserve's preferred measure of inflation, is due on Friday, May 31.

Current Bitcoin Price and Market Trends

Bitcoin is currently trading down 1% on the day at around $68,000. It dropped to an intraday low of $67,122 but managed to recover during the Thursday morning Asian trading session. BTC has been relatively flat for the past fortnight and is down 7.7% from its mid-March all-time high as the consolidation continues. The majority of altcoins are experiencing larger losses today, with markets retreating 1.3% to $2.68 total capitalization.

In conclusion, Bitcoin's price has been highly responsive to changes in inflation data, specifically CPI. The research predicts that Bitcoin ETF inflows will likely remain strong, potentially pushing BTC to new all-time highs. Inflation is expected to hover around a similar level, with a downward bias soon occurring, which could lead to Bitcoin reaching a new all-time high. The current market trends indicate a flat consolidation phase, with Bitcoin trading down 1% on the day.