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Bitcoin price heads higher as US CPI data continues to cool

The cryptocurrency has had a volatile day

POLAND - 2023/07/06: In this photo illustration, the Bitcoin logo displayed on a smartphone with stock market percentages in the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
Bitcoin prices are edging towards the $31,000 mark. Illustration: Omar Marques/SOPA/LightRocket/Getty (SOPA Images via Getty Images)

Bitcoin (BTC-USD) prices whipsawed on Wednesday edging up towards the $31,000 (£23875.74) mark as US CPI data came in hot.

By 3.30pm in London, it was up around 1% on the day to trade at $30,760 having fallen slightly earlier.

New data showed that US inflation cooled off sharply in June. The CPI rose 3% from a year ago, the slowest rate for more than two years. The report was surprisingly upbeat and will form future rate hiking cycles for the Fed.

"Cold as ice – that is the number that comes to mind when you look at the US CPI data," said Naeem Aslam, chief investment officer at Zaye Capital Markets. "This is the lowest number since the pandemic, and this is certainly good news for the economy, but it is important to keep in mind that this is still a transitory situation. But overall, traders are cheering this event, and while futures have moved higher, the dollar index has lost more momentum."

Meanwhile, ether (ETH-USD) also rose around 1% to trade at $1,895.

The moves come following a positive market prediction from British bank Standard Chartered (STAN.L) bank on Monday. Analysts projected that Bitcoin prices would reach $50,000 by the end of 2023 and cross the $120,000 mark in 2024. This is an upward revision from the $100,000 it predicted in April.

"We now think this estimate is too conservative, and we therefore see upside to our end-2024 target," the report said, citing increased bitcoin miner profitability as one of the factors that will drive the price.

Watch: Vanguard Adds Exposure to Bitcoin Mining Companies

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