Gate.io Blog Bitcoin Price Analysis: BTC Surges Above $28K on US Inflation and BRC-20 demand

Bitcoin Price Analysis: BTC Surges Above $28K on US Inflation and BRC-20 demand

11 May 09:29

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As the world's first cryptocurrency, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> continues to make headlines as it climbs the charts once again. Surging past the $28,000 mark on May 10, 2023, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> is capitalizing on the slower-than-expected inflation rate in the United States. In this article, we'll provide an in-depth analysis of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s recent price movement, the potential factors driving this increase, and the insights experts share about its future direction.
## Lower Than Expected US Inflation Rate 
Data from popular exchanges like **[Gate.io](https://www.gate.io/ "Gate.io")** showed <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> lingering in a narrow trading range ahead of the April Consumer Price Index (CPI) release. Recent reports indicate that the US CPI inflation rate fell to 4.9% in April, lower than the anticipated 5.0%. This decrease is significant news for <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>, as the cryptocurrency often gains value amid inflation concerns. With its decentralized nature and capped supply, investors see <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as a potential hedge against inflation.

In the minutes following the news, the price of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> rose more than 1% to above $28,000. CPI serves as a conventional volatility trigger for high-risk assets such as <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and is one of the key factors the Federal Reserve takes into account when determining interest rates. While the next change is a month away, experts predict the decline in inflation to persist or even accelerate in the coming months.
## Bitcoin Price Analysis
Without a catalyst in the market, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> was trading sideways below the $28,000 level for nearly a week. With the US CPI's release, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> got the required catalyst as it broke out past the $28,000 level, hitting a peak of $28,327. And while the cryptocurrency is experiencing a pullback, it has successfully sustained above the $28,000 mark, making it a critical support level for <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>.

The crypto is currently in an uptrend, and the bulls are trying to push it toward the $29,000 resistance level. If the bulls can push the price above this resistance level, it might mean that the corrective phase is over. As a result, [Bitcoin could first rally to $30,000](https://www.gate.io/trade/BTC_USDT "Bitcoin could first rally to $30,000") before attempting an up-move to $32,500.

On the other hand, if the price turns down and breaks below the $28,000 support, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> could descend to the breakout level of $25,250. It is a crucial level to monitor because a fall below this level could intensify <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s selling rate, plunging its price to the psychologically important level of $20,000.
## Experts Share Insights on Bitcoin's Future Direction
Amid <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s impressive performance, several industry experts have weighed in on the cryptocurrency's next move. In a recent interview, Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, shared his perspective on the future direction of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s price. He suggested that a continuation of the current bullish trend could push <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s price toward the $30,000 level, which would be a significant psychological barrier for the cryptocurrency. However, he also warned that the market's volatility might cause <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> to undergo price corrections in the short term.

Moreover, McGlone highlighted the increased adoption of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as an inflation hedge by institutional investors, which could lead to further growth for the cryptocurrency. He believes that the ongoing trend of corporations and financial institutions allocating a portion of their portfolios to <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> is likely to persist, further solidifying its status as a store of value. Meanwhile, other experts have shared similar thoughts, saying the cryptocurrency's resilience in the face of regulatory headwinds and macroeconomic uncertainties is a testament to its growing importance as a global financial asset.
## The Role of Bitcoin as an Inflation Hedge
As mentioned earlier, one of the critical factors driving <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s recent rally is its potential as an inflation hedge. With its fixed supply and decentralized nature, cryptocurrency is considered a reliable store of value, particularly during economic uncertainty.

The COVID-19 pandemic and the subsequent economic downturn have accelerated discussions around the utility of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as an inflation hedge. With central banks worldwide injecting massive amounts of liquidity into the market and implementing ultra-low interest rate policies, concerns about inflation have become increasingly widespread.

As a result, both retail and institutional investors have turned to <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as a means of protecting their wealth against potential inflation. This growing interest in <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> has further driven its price upward, solidifying its status as a legitimate financial asset.
## The BRC-20 rush 
BRC-20 token standard is a new breed of fungible tokens that leverages Ordinals and In_script_ions to manage and create token contracts, token transfers, and token minting, all of which are stored on the <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> base chain.

As of May 9th, BRC-20 <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> tokens have surged beyond $1 billion in total market capitalization, accompanied by a trading volume of $207.7 million over the past 24 hours. Some of the prominent tokens deployed on the blockchain include [ORDI](https://www.gate.io/trade/ORDI_USDT "ORDI"), NALS, VMPX, PEPE, and MEME, which have shown significant price fluctuations ranging from +11% to -55% within a day.

The rush to BRC-20 standard is already starting to affect the cost of transactions, which at some point may drastically affect the <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">btc price</a>. Unlike ERC-20, BRC is not based on smart contracts, which takes a slight toll on the blockchain. Major exchanges are also jumping on the bandwagon, with industry leaders like Gate.io, already boasting over six BRC-20 tokens listed and traded on the platform. Such pace of adoption leaves hope that the demand will soon stabilise, lowering blockchain’s transaction cost back to its natural levels. 
## Conclusion
At the time of writing, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> is rallying at $28,200, and it appears to be driven by a combination of lower-than-expected US inflation data, growing demand from traders, and increasing interest from institutional investors. As the cryptocurrency cements its status as an inflation hedge and a legitimate financial asset, market participants should continue to monitor the factors that could potentially impact its price.

While the current trend is decidedly bullish, investors should exercise caution and remain informed about the ever-changing landscape of the cryptocurrency market. With its proven resilience and growing importance in the global financial ecosystem, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s future looks promising. Still, it is crucial to stay vigilant and well-informed to navigate this dynamic market.

<div class="blog-details-info">
<div>Author:** Andrei. Dr.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

BTC/USDT + 1.81%

Lower Than Expected US Inflation Rate

Bitcoin Price Analysis

Experts Share Insights on Bitcoin‘s Future Direction

The Role of Bitcoin as an Inflation Hedge

The BRC-20 rush

Conclusion

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Bitcoin Price Analysis: BTC Surges Above $28K on US Inflation and BRC-20 demand

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