Bitcoin Nears $30,000 Mark Ahead of U.S. Inflation Data

Bitcoin (BTC), the world’s largest cryptocurrency, surged on the evening of April 10, positioning itself for a potential re-test of the $30,000 mark.

Bitcoin Approaches $30,000 Ahead of U.S. Inflation Data

On the night of April 10, Bitcoin experienced a significant upswing, climbing from $28,200 to $29,380.

Previously, Bitcoin had been trading within the $27,000 to $28,500 range since late March, struggling to break back towards its recent high of $29,184 set on March 30.

By early April 11, Bitcoin continued its upward trajectory, briefly hitting a new year-to-date high of $29,990—its highest level since early June 2022.

1-hour Chart of BTC/USDT on Binance as of 08:10 AM on April 11, 2023

Bitcoin is now in its best position in over six months to reclaim the $30,000 psychological level.

There isn’t a clear catalyst for Bitcoin’s latest rise, leading to speculation that the move could be positioning for the U.S. Consumer Price Index (CPI) data release on April 12. This CPI report will provide crucial insights into inflation trends in the world’s largest economy. Recent CPI releases have historically caused significant volatility in both stock and crypto markets.

Early forecasts from economic observers predict a sharp decline in the U.S. CPI from 6% in February to around 5.2% - 5.3%. If this occurs, it will mark the ninth consecutive month of declining inflation since peaking at 9.1% in June 2022.

Additionally, Bitcoin's recent momentum has been supported by internal network developments. Both the Bitcoin network hash rate and mining difficulty reached new all-time highs in early April, indicating strong security as miners continue to ramp up their operations.

Hashrate (green) and Bitcoin Price (black) Fluctuations Over the Past Year. Source: Blockchain.com

This increase in network activity is partly driven by the upcoming Bitcoin halving event, expected around April 2024, which will reduce the block reward from 6.25 BTC to 3.125 BTC.

MicroStrategy, the publicly traded company holding the largest amount of BTC, has made two additional purchases in the past two weeks, bringing its total Bitcoin holdings to 140,000 BTC. If Bitcoin reaches the $30,000 mark, this substantial BTC holding will be valued at over $4.2 billion, effectively bringing MicroStrategy back to break-even.