The Fed gets some serious heat as CPI numbers show just how quickly prices are rising for U.S. consumers.
Bitcoin (BTC) saw a brief boost on April 12 after the United States saw its highest Consumer Price Index (CPI) data since 1981.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Analyst: Inflation echoes “mythical stories”
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD spiking $400 instantly as the data was released.
The U.S. CPI was up 8.5% year-on-year and rose 1.2% in March, alone, according to the U.S. Bureau of Labor Statistics.
The most in over 40 years, the results showcased the inflationary pressures active throughout the economy and implied that the Federal Reserve had much ground to make up. Criticism of the Fed was everywhere, including from the likes of traditional economists such as Steve Hanke.
“U.S. CPI came in at *8.5%* level, which means that inflation is likely already in the double digits,” Gabor Gurbacs, director of digital assets strategy at VanEck, responded.
“A few years ago these type of numbers were mythical stories associated with Venezuela, Argentina, Zimbabwe and Weimar. Central banks have failed. It’s time for plan ₿.”
Bitcoin’s reaction was in line with correlated stock markets, the S&P 500 likewise gaining 1% on the open and Asian markets recovering from previous losses.
“Inflation is worse than you think, and Bitcoin is better than you know,” MicroStategy CEO Michael Saylor commented, echoing Gurbacs.
U.S. CPI trends chart. Source: U.S. Bureau of Labor Statistics
Will RSI deliver for bulls again?
Meanwhile, on-chain signals were giving hope to some analysts on the day despite BTC/USD losing $40,000 support overnight.
Related: BTC stocks correlation ‘not what we want’ — 5 things to know in Bitcoin this week
Chief among these was Bitcoin’s relative strength index (RSI), now eyed as a potential pretext for a trend turnaround.
Returning to a reading of 35 this week, RSI thus printed a pattern, which historically saw upside ensue, popular Twitter account BTCfuel noted.
#BITCOIN MEGAPUMP SOON
When looking at the RSI, the 2022 Bitcoin correction is very similar to the 2021. Strong BULLISH move imminent pic.twitter.com/blmLVCxVRc
— BTCfuel (@BTCfuel) April 12, 2022
As Cointelegraph reported, BTC price predictions included a leg down to $30,000 in June as a result of the macro picture.
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