On May 13, the U.S. April CPI data was released. The phrase "inflation data is 'good'" essentially set the tone for the current market's macro expectations - the trend of cooling inflation is clear, and the probability of rate cuts within the year has significantly increased. Meanwhile, the market reacted quickly, with Bitcoin approaching $105,000, and Ethereum skyrocketing over 50% in just a week, reigniting market enthusiasm.
This time, we need to calmly review the logic behind it, and more importantly, judge what truly influences the main line of the market.
1. Tariffs returning to normal, event-driven negatives gradually clearing
After achieving phased progress in US-China trade negotiations, the uncertainty brought by tariffs has significantly decreased. Previously, the market was worried that geopolitical risks would further escalate, leading to global liquidity tightening; now it has basically returned to a stable state.
This means that tariffs are no longer the dominant variable driving short-term market fluctuations, and investors' focus is shifting to new key indicators.
2. Macro main line refocusing: Inflation and economic expectations are key
The CPI data for this period shows:
Core CPI increased by 0.2% month-over-month, lower than the expected 0.3%;
Overall CPI year-on-year fell to 2.3%, setting a new low since February 2021;
Core year-on-year remained at 2.8%, in line with market expectations.
These three data points have conveyed a signal to the market: inflationary pressures are easing, and the Federal Reserve has more room to start its rate-cutting path within the year.
From the CME interest rate futures pricing, the market has begun to factor in the possibility of the first rate cut in September. For risk assets, especially crypto assets, this warming liquidity expectation often acts as a catalyst for market movements.
After the CPI release, it showed that inflation had not heated up, strengthening the market's expectation of the Fed cutting rates this year, with Bitcoin once again approaching $105,000. Ethereum has been even stronger, breaking through $2,700 this morning, with a 24-hour increase of over 8%, and a weekly surge of 50%, aiming for $3,000. SOL broke through $180 this morning, with a 24-hour increase expanding to 4.79%.
Led by ETH, ETH ecosystem tokens, and previously leading Meme tokens have started to rise significantly. For example, staking leader Ethfi increased by 30% in 24 hours, while Bome took over Squirrel (punt) with a 24-hour increase of 33%. Additionally, the AI sector also surged significantly.
The core logic driving Ethereum's rise comes from multiple dimensions:
1. Pectra upgrade approaching, technical aspects reshaping network value
The Pectra upgrade launched on May 7 introduced the crucial EIP-7702 (account abstraction), significantly enhancing user experience; at the same time, the staking mechanism upgrade increased the validator staking limit from 32 ETH to 2048 ETH, addressing the technical bottleneck that has long plagued institutional entry.
2. Entry of giants, RWA support
Financial giants like BlackRock are exploring practical application scenarios of the Ethereum network through RWA tokenization, with ETH evolving from an 'asset' to an 'infrastructure' role; furthermore, some analysts point out that Ethereum is expected to officially gain SEC approval for staking ETFs this year, enhancing both liquidity and compliance.
3. Market Expectations Resonance: ETH Long-term Target Adjusted Upwards
Analyst VirtualBacon recently predicted: if BTC rises to $200,000, ETH may exceed $10,000. Such long-term pricing logic is attracting more capital inflow.
Trump once again pressures Powell
Early this morning, Trump wrote on the social platform Truth Social, "There is no longer any inflation! Gas, energy, groceries, and almost all other goods are dropping in price!!!"
"The Federal Reserve must lower interest rates, just like Europe and China have already done." Trump added, "What’s going on with 'Mr. Delay' Powell? Isn't this unfair to the soon-to-soar America?"
Trump concluded by writing, "Let the rate cuts happen, that would be a wonderful thing!"
Final Thoughts
We are undergoing a structural capital inflow process. Instead of focusing on short-term fluctuations, it’s better to clarify the logic behind the trends:
Macro Environment: Rate cuts approaching, liquidity restarting
Main narrative: Ethereum upgrade + RWA + institutional entry
Rotation Rhythm: Meme, AI, and Staking Sectors are taking turns
Opportunities are not lacking, it just depends on whether you dare to stake your claim when trends begin to emerge.
