Recent fundamental buying activity in the Bitcoin market has been driving prices higher, and traders are willing to pay a premium for future Bitcoin purchases, predicting prices to rise, analysts say.
“We see underlying order flow pushing the market higher, with Bitcoin’s three-month annualized rate exceeding 10% over the weekend and perpetual funding rates rising,” ZeroCap analysts said. Monday market report.
The Zerocap report’s observations are consistent with those of the Velo Data chart, which shows that Bitcoin’s base rate has increased since the release of easing US Consumer Price Index (CPI) data for April last Wednesday and is currently in the 9-12% range.
The Bitcoin 3-month annualized price, which indicates how expensive the futures contract price is compared to the current price, rose 11.4% on derivatives exchanges such as Deribit. Binance is currently up 10.47% and OKX is up 9.68%. All of these interest rates have recorded significant increases since the US April inflation announcement on Wednesday 15 May.
bitcoin 
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is based on a 3-month annual basis. Image: Velo data.
QCP Capital analysts also pointed to a post-CPI rally in the cryptocurrency market. “Bitcoin is trading in a range above $66,000. We observed another positive inflow in ETF data, with GBTC recording a net inflow last Friday,” the analysts added.
Optimistic macro sentiment continues
Bitcoin has mostly held above $66,000 since cooler US CPI data was released. Low inflation data in April appears to have given the broader market an excuse to rally, with all three major US stock indexes hitting record highs last week.
As inflation eases, the likelihood that interest rates will remain high for longer decreases slightly. Lower interest rates reduce costs and increase investors’ willingness to purchase riskier assets, such as cryptocurrencies.
Buoyant market sentiment permeated trading sentiment this week, with the broader market continuing its risk-on move following the CPI performance late last week.
In morning trading, major European and British stock indices were in the red. In London, the FTSE 100 rose 5.97 points to 8,426.23, up 0.071%. The regional Stoxx 600 index was trading 0.22% higher at 524.1o in Europe. Tokyo’s Nikkei 225 index was up 0.73% at 39,069.68, while Australia’s S&P/ASX 200 index was up 0.63% at 7,863.70. Korea’s KOSPI also rose 0.64% to 2,742.14. U.S. stock futures were higher in pre-market trading, with the NYSE Composite Index rising 0.39%.
Low economic growth still a threat
However, the threat of a surge in underlying inflation coupled with low economic growth remains, according to Zerocap analysts. “This is a risky situation for the US Federal Reserve (Fed) and other central banks, but the market appears to be on the upswing for now,” the analysts added.
Zerocap also said its analysts may have a stake in the assets mentioned in this week’s report.
As of 8:34 a.m. ET on Monday, Bitcoin was trading flat at $67,029, according to The Block’s pricing page. The GM 30 index, which represents the top 30 cryptocurrencies, rose 0.18% to 135.66 over the past 24 hours.
Bitcoin was trading above $67,000 on Monday. Image: Block.
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