Bitcoin (BTC) attempted to reclaim the $105,000 level today following better-than-expected US inflation data, before settling around $104,000. The leading cryptocurrency’s price action comes amid renewed institutional accumulation and growing retail interest.
US Inflation Data Fuels Bitcoin Rally
The Consumer Price Index (CPI) for April came in lower than anticipated at 2.3% annually, marking the lowest level since February and beating analyst expectations of 2.4%. Core inflation, which excludes volatile food and energy prices, increased by just 2.1% – reaching lows not seen since 2021.
This positive inflation data has reignited expectations for potential Federal Reserve interest rate cuts at the next FOMC meeting, providing a catalyst for Bitcoin’s upward momentum.
Institutional Buying Pressure Intensifies
Major market players continue to accumulate Bitcoin aggressively. Strategy announced a substantial purchase of 13,390 BTC valued at $1.34 billion. Additionally, Twenty One Capital acquired 4,812 BTC worth $458.7M, bringing their total holdings to 36,312 BTC.
Retail Investors Join the Rally
Retail participation is also showing signs of growth, with small investors (transactions under $10,000) increasing their buying activity by 3.4% between April 28 and May 13. According to CryptoQuant analysis, this surge in retail interest could signal further upside potential.
Technical Analysis
Bitcoin’s technical indicators remain bullish despite reaching overbought territory:
- RSI at 72.52 – above overbought threshold but showing continued momentum
- Bollinger Bands expanding with price approaching upper band at $108,439
- Key support established at $100,000 psychological level
- 24-hour gains of 7.5%
FAQ
What is driving Bitcoin’s current rally?
The rally is supported by positive US inflation data, increased institutional buying, and growing retail participation.
What are the key resistance levels to watch?
The immediate resistance lies at $105,000, with the next major target at $108,439 based on the Bollinger Bands.
Is Bitcoin overbought?
While technical indicators show overbought conditions, strong buying pressure and institutional demand suggest potential for continued upside.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always conduct your own research before making investment decisions.