US Inflation Hits 3-Year High, Pressuring Bitcoin and Gold

Crypto Insight Summary: “We continue to view the current macro environment as a headwind for Bitcoin,” 10x Research’s Markus Thielen said. Market analysts have cautioned that Bitcoin and gold may face further headwinds this year following a 4.2% annual increase in the US Consumer Price Index (CPI) in May, according to figures released on Wednesday. The surge in the consumer price index, a broad gauge of goods and services costs across the US economy, deflated hopes that the central bank will reduce rates, with some analysts now expecting [rate hikes](https://cointelegraph.com/markets/can-bitcoin-avoid-another-sell-off-after-a-bank-of-japan-rate-hike) later this year — bad news for riskier assets such as crypto. Bitcoin has already had a troubling first half of the year. Bitcoin prices have fallen 36% since January, while gold is down 23% from its January peak. At the same time, crude oil prices have surged more than 50% over the same period. “Today’s in-line CPI print keeps the Fed cautious, data-dependent, and in no rush to cut,” Iggy Ioppe, chief investment officer at institutional trading firm Theo, told Cointelegraph. CPI tracks changes over time in the prices of a basket of goods and services typically bought by consumers and is one of the Federal Reserve’s key data points for monetary policy decisions. “For Bitcoin, an in-line print is unlikely to be a clean catalyst either way,” he added. Markus Thielen of 10x Research told Cointelegraph he sees the current macro environment as a continued headwind for Bitcoin. Crypto Insight Analysis: Direction: Bearish BTC Impact: Minor Impact Horizon: Short-term (1-3 days) Reasoning: Rising US CPI and potential rate hikes create headwinds for risk assets like Bitcoin.