Bitcoin Futures Swell Following Last Week’s Mild US Inflation Figures

Key Points

• Bitcoin’s futures basis is rising due to increased buying activity and a positive market sentiment.
• Post-CPI data release, Bitcoin has been trading above $66,000, suggesting a bullish macro sentiment.

The recent surge in purchasing activity within the Bitcoin market is leading to a price hike. Traders are demonstrating a willingness to pay a premium for future Bitcoin purchases, indicating an expectation of price increase.

Market Sentiment and Bitcoin Futures

Analysts from Zerocap have observed an increase in fundamental order flow driving the market upwards. Over the weekend, the Bitcoin three-month annualized basis, which measures the cost difference between futures contracts and the current price, exceeded 10%. This increase indicates a growing positive market sentiment.

This observation is consistent with Velo Data charts, which show an increase in Bitcoin’s basis rate following the release of the U.S. Consumer Price Index (CPI) data for April. This rate is now within the 9-12% range.

Derivatives Exchanges and Bitcoin

On various derivatives exchanges, such as Deribit, the Bitcoin three-month annualized basis has shown a significant increase. On Binance, it stands at 10.47%, while on OKX, it’s risen to 9.68%. These rates have surged since the release of April’s U.S. inflation data.

Analysts from QCP Capital have also noted a post-CPI rally in the cryptocurrency market. “Bitcoin has been trading range-bound above $66,000. Last Friday, we observed another positive inflow in ETF data, with GBTC recording net inflows,” they stated.

Bitcoin and Inflation

Since the release of the U.S. CPI data, Bitcoin has maintained a value above $66,000. The lower inflation data for April appears to have encouraged wider markets to bid up, with major U.S. equity indexes reaching record highs last week.

Lower inflation slightly reduces the chances of interest rates remaining high for an extended period. This decrease in interest rates reduces the cost of money and increases the willingness of investors to purchase riskier assets like cryptocurrencies.

Global Market Sentiment

The positive market sentiment has continued into this week, with wider markets maintaining the risk-on moves they initiated last week. Major European and UK equity indices were red in morning trading, with the FTSE 100 in London posting a slight increase.

However, Zerocap analysts warn that the threat of underlying inflation spikes combined with low economic growth remains. “This is a risky situation for the U.S. Federal Reserve and other Central Banks, but for now markets seem to be winding up for a move higher,” they stated.

On Monday, Bitcoin traded flat at $67,029. The GM 30 Index, which represents a selection of the top 30 cryptocurrencies, has increased by 0.18% to 135.66 in the past 24 hours.