Recent inflation data in the U.S. show that the annual inflation rate has reached its lowest level since early 2021, which may positively affect the cryptocurrency market.
Current Status of Inflation and Interest Rates
New inflation data indicated a 0.3% increase in housing in April, constituting a significant portion of the overall inflation rise. The energy sector increased by 0.7% due to taxes on natural gas and electricity, despite a decrease in gasoline prices. The food index also showed a decline of 0.1%, with domestic food prices dropping by 0.4%, while dining out costs rose by 0.4%.
Impact of Inflation on the Cryptocurrency Market
April's inflation data represents the smallest 12-month increase since February 2021. Excluding food and energy, the overall index rose by 2.8% for the year. The market anticipates potential rate cuts from the Federal Reserve, which could support the growth of cryptocurrencies.
Prospects for the Cryptocurrency Market
If the Federal Reserve enacts two or more rate reductions this year, favorable conditions for cryptocurrencies may emerge. If trading volumes remain consistent through May and June, Bitcoin could reach new heights, encouraging growth in other altcoins.
Thus, the current economic situation in the U.S. and declining inflation create conditions for potential growth in the cryptocurrency market in the coming months.
