US Inflation Comes in Lower Than Expected: Here’s How Bitcoin Could React
Bitcoin could benefit largely as the latest U.S. CPI report suggests inflation cooled lower than expected despite recent tariff uncertainties. The latest Consumer Price Index (CPI) data released on May 13 by the U.S. Bureau of Labor Statistics revealed that inflation slowed more than anticipated.
US Inflation Slows to 2.3%
Specifically, the annual inflation rate for April came in at 2.3%, easing from 2.4% in March. This represents the lowest year-over-year inflation since 2021, defying predictions that recent tariff hikes on Chinese imports would stoke price pressures. According to Investor’s Business Daily, headline CPI rose by just 0.2% on a monthly basis, while core CPI — which excludes volatile food and energy prices — also saw a modest 0.2% monthly uptick and a 2.8% annual rise.
These figures are softer than expected, especially in light of aggressive U.S. tariffs. Despite these trade barriers, broader consumer inflation remains tame, with price increases mostly limited to select household and tech-related products.
In reaction, equities showed mixed responses, with the S&P 500 and Nasdaq ticking upward while the Dow saw a slight retreat due to individual stock movements. Treasury yields inched higher to 4.46%.
Impact on Bitcoin Price
Interestingly, Bitcoin responded to the CPI data with a brief dip, shedding 0.16% within the hour following the release. Before the announcement, Bitcoin had recorded strong gains, climbing from a session low of $101,678 to an intraday high of $103,967. Although the momentum softened after reaching that peak, Bitcoin remained resilient, trading at $103,523 at the time of reporting. It has managed to post a 0.61% gain on the day and has surged by nearly 10% month-to-date in May 2025.
Notably, ahead of the inflation data release, crypto analyst Washigorira flagged the potential for volatility, noting that Bitcoin was trading within a daily inside bar pattern, suggesting a breakout was imminent. He pointed to the fair value gap (FVG) on the daily chart serving as a support level.
Meanwhile, following the CPI announcement, analyst Femto XBT provided a bullish take, highlighting that the weekly chart for Bitcoin remains positive.
$BTC| 1H: Today Analysis: US inflation falls to 2.3%, lower than expectations. The weekly chart is bullish. Longers are still in the game. New ATH soon. LFG!
Key levels to watch:
- 104k – Weekly open
- 106k – New ATH
— Femto XBT (@FemtoXBT) May 13, 2025
He emphasized that long-term buyers are maintaining their positions, suggesting the path to a new all-time high could be near. He identified $104,000 as the key weekly open level, with $106,000 standing as the next target that could mark a record high for Bitcoin.
Essentially, Bitcoin’s short-term pullback appears to be a healthy consolidation. Lower-than-expected inflation increases the likelihood of a dovish Fed pivot, which historically benefits risk-on assets like crypto. In particular, Bitcoin tends to rally when investors anticipate lower interest rates.
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