The latest United States inflation data has positively surprised the stock market and led to a bid for Bitcoin. The Consumer Price Index (CPI) showed that inflationary pressures are declining faster than expected, with CPI coming in 0.1% below market forecasts. This news has resulted in a warm reaction from stocks, with the S&P 500 up 1.5% on the day. Bitcoin, on the other hand, reacted only modestly to the news but still remains rangebound. On-chain monitoring resource Material Indicators noted that liquidity is thin, which is aiding volatility and leading retail investors to increase their exposure to Bitcoin. Despite a 4% decrease from its recent highs, market participants argue that this is a normal and healthy correction within the broader uptrend of Bitcoin. Analysts predict that deeper price corrections could still occur before the April 2024 block subsidy halving event. Overall, this article highlights the positive impact of declining inflation on stocks and Bitcoin, while also acknowledging the potential for further price corrections in the future.
