Bitcoin and the rest of the cryptocurrency market experienced a notable surge following the release of the latest US Consumer Price Index (CPI) data, and now eyes are on tonight’s Federal Open Market Committee (FOMC) meeting.
Bitcoin and Ethereum posted gains of 3.4% and 2.43% over the past 24 hours, respectively. The crypto market remains uncertain, with BTC hovering at around $70,000, Ethereum struggling to get past $4,000, and investors treading with caution. However, there has been a notable shift in market sentiment, especially among retail traders on Binance.
Retail Investors’ Long Positions
According to Hyblock’s latest findings, 70.25% of accounts on crypto exchange Binance hold net long positions on Bitcoin, a significant increase from 57% just 24 hours prior. This essentially suggests that retail players are increasingly attempting to “buy the bottom,” showing a strong belief in a potential rebound ahead of the FOMC meeting.
“We are down quite a bit, but retail is still favoring long positioning. 70.25% of accounts on Binance are currently in a net long on BTC. Just 24 hrs ago, this was 57%. In other words, they continue they continue trying to buy the bottom.”
It is important to note that this behavior by retail investors comes amidst ETF outflows, which demonstrates investor caution ahead of the fact.
Data compiled by Farside revealed that Grayscale’s GBTC experienced the largest net outflows amounting to $121 million. Following closely behind are ARK Invest’s ARKB, which witnessed $65.5 million, and Bitwise’s BITB with $11.7 million in outflows.
Next up were Fidelity’s FBTC with $7.4 million and VanEck’s HODL with $3.8 million in outflows. Meanwhile, BlackRock’s IBIT did not record any activity on Tuesday. However, the latest wave of outflows ended the 19-day streak of net inflows for the 11 spot Bitcoin ETFs in the US, with outflows totaling almost $65 million the day before.
Bitcoin Bullish on Optimistic CPI
Lower inflation figures are further expected to boost the crypto market, which has been range-bound for weeks. In May, the CPI remained essentially unchanged, as it surpassed the previously estimated 0.1% increase and declined from April 0.3%. Annually, CPI increased by 3.3%, slightly below both predictions and April’s 3.4%.
The latest price movement and the retail long position could also mean that BTC had already priced in the latest CPI data and the upcoming Fed decision.
As described by IREN board member Mike Alfred, Bitcoin is a “highly intelligent global macro asset” that potentially anticipates and incorporates major economic factors well in advance of their release.
Charlie Bilello, the Chief Market Strategist at Creative Planning, tweeted,
“Overall, US CPI moved down to 3.27% year-on-year in May from 3.36% in April. US inflation has now been above 3% for 38 straight months. US Core CPI (ex-Food/Energy) moved down to 3.41% year-on-year from 3.62% last month. This is the lowest core inflation reading since April 2021.”
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