On 14/05/2025, Bitcoin holds at 103,798 USD after the US inflation report for April shows the CPI increased by 2.3%, the lowest since February 2021, in the context of the Fed holding interest rates and US-China lowering tariffs. Could this be a positive signal for crypto? Let's analyze in detail.
US Inflation Decreases: Bitcoin Nearly Unchanged
A report from the US Bureau of Labor Statistics on 13/05 shows that the Consumer Price Index (#CPI ) in April increased by 0.2%, reversing the 0.1% decline in March. The annual inflation rate decreased to 2.3% (from 2.4%), the lowest since February 2021. Core inflation (excluding food and energy) remains stable at 2.8%, rising 0.2% for the month, as expected. Bitcoin saw slight fluctuations, from 101,758 USD on Tuesday morning to 103,798 USD, down 0.3% (CoinGecko). Ethereum rose slightly by 0.5%, Solana dropped by 0.1%, while meme coins like Dogecoin and Shiba Inu remained unchanged.
Arthur Azizov (B2 Ventures) comments: “If CPI rises sharply, I expect Bitcoin to drop deep to 100,000 USD.” He believes Bitcoin is increasingly resembling a macro tool thanks to institutional capital, with the potential to drop to 88,000 USD if it breaks below 93,000 USD, or rise to 124,000-134,000 USD if it surpasses its historical peak.
Fed Holds Interest Rates: Pressure from Trump's Tariffs
The Fed maintains interest rates at 4.25%-4.50% in the meeting on 07/05, the fourth consecutive time, despite pressure from $TRUMP demanding a rate cut. Chairman Jerome Powell explains: “Trump's tariff hikes are larger than expected, causing economic uncertainty.” He asserts that the Fed is not influenced by political pressures, focusing on stabilizing prices and employment. However, the market is volatile, with CME FedWatch showing only a 15% chance of a rate cut in June, down from 34% at the beginning of the month.
Aurelie Barthere (Nansen) comments: “Core inflation is stable, but ‘super core’ (services excluding housing) has dropped to 2.9% – the lowest in 4 years, which is closely monitored by the Fed. The risk comes from rising service inflation again, while energy remains deflationary.”
US-China Lower Tariffs: Stocks Rise, Crypto Less Responsive
On 12/05, the US and China unexpectedly reached an agreement to lower tariffs within 90 days: the US reduced tariffs on Chinese imports from 125% to 30%, while China reduced from 145% to 10%. Treasury Secretary Scott Bessent will meet Chinese officials in Switzerland to discuss the next steps. US stocks (S&P 500) rose the most in over a month, but Bitcoin was less responsive, holding at 103,798 USD, indicating that crypto is more influenced by Fed policy and institutional capital flows.
Impact on the Crypto Market
This event brings many signals:
Increasing confidence: Crypto fund flows reached 3.4 billion USD last week, Bitcoin ETFs attracted 1.8 billion USD, and are forecasted to accumulate 330 billion USD into Bitcoin by 2029.
Stable market: Bitcoin (103,798 USD), Ethereum (2,500 USD), and Solana (146 USD) are less volatile, showing resilience against macroeconomic news.
Awaiting new data: Investors are focusing on the Producer Price Index (PPI) on 15/05 and PCE on 30/05 to predict Fed's moves.
Future Outlook
If the Fed cuts interest rates in the next 1-2 years, Bitcoin could exceed 134,000 USD as predicted by Azizov, thanks to institutional capital and positive sentiment. However, if service inflation rises again or the Fed continues to keep rates high, crypto could face downward pressure, especially if it breaks below 93,000 USD.
Conclusion: Will Bitcoin Continue to Stabilize or Face Turbulence?
Bitcoin holds at 103,798 USD despite US inflation dropping to 2.3% and US-China lowering tariffs, but the Fed keeps interest rates at 4.25%-4.50%, creating pressure. With only a 15% chance of a rate cut in June, the crypto market needs more macro data to determine its direction. Investors should closely monitor PPI and PCE to adjust strategies.
Risk warning: Crypto investment carries high risks due to price volatility and economic uncertainty. Please consider carefully before participating.