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Bitcoin Volatility Returns After May CPI Prompts Fed Rate Cut Outlook

May’s CPI report triggered bullish retail sentiment, fueling a 25.8 percent jump in large Bitcoin transactions.

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Overview

  • U.S. consumer prices rose 2.4 percent in May, below projections and raising hopes for Federal Reserve rate cuts later in 2025.
  • Bitcoin briefly topped $110,000 before sliding to around $109,000 as markets reacted to the inflation data.
  • The CME FedWatch tool indicates a 61 percent chance of a 25 basis point rate cut at the September FOMC meeting.
  • Large Bitcoin transaction volumes surged 25.8 percent and daily active addresses climbed 13.4 percent after the CPI release.
  • Analysts surveyed expect Bitcoin to reach new all-time highs, with forecasts ranging between $150,000 and $200,000 in this bull cycle.