Crypto News Today- Bitcoin Futures Premium Rises Post Soft US Inflation Data

Bitcoin Futures Premium Rises After Mild US Inflation Data

Crypto News– Analysts suggest that recent underlying buying activity in the Bitcoin market is driving prices higher. Traders are willing to pay a premium for buying Bitcoin in the future, indicating their anticipation of price appreciation.

We see fundamental orderflow driving the market higher, with the bitcoin three-month annualized basis having shot above 10% over the weekend, and perpetual funding rates are on the rise, showing that the market is building positive sentiment

Zerocap analysts

The observations made in the Zerocap report are consistent with those of the Velo Data charts. According to these charts, since the release of softer U.S. Consumer Price Index (CPI) data for April last Wednesday, Bitcoin’s basis rate has increased, now ranging between 9% and 12%.

The three-month annualized basis for Bitcoin, which measures the premium of futures contracts over the current price, has also risen on derivatives exchanges like Deribit, reaching 11.4%. Similarly, Binance’s rate is now at 10.47%, while OKX has increased to 9.68%. These rates have all seen significant upticks since the release of April’s U.S. inflation data on Wednesday, May 15th.

The Optimistic Macro Sentiment Persists

Since the release of the cooler U.S. CPI data, Bitcoin has largely maintained levels above $66,000. The subdued inflation figures for April appear to have provided broader markets with a reason to rally, as evidenced by all three major U.S. equity indexes reaching record highs last week.

The decline in inflation, albeit slight, reduces the likelihood of interest rates remaining elevated for an extended period. Lower interest rates diminish the cost of borrowing and bolster investor appetite for riskier assets like cryptocurrencies.

The Lingering Threat of Sluggish Economic Growth

However, Zerocap analysts caution that the threat of underlying inflation spikes, coupled with sluggish economic growth, still looms. This presents a precarious situation for the U.S. Federal Reserve and other central banks, but for the time being, markets appear to be gearing up for an upward move, the analysts added.

Zerocap also disclosed that its analysts may have vested interests in the assets mentioned in this week’s report.

As of Monday, Bitcoin traded flat at $67,029, as per The Block’s Prices Page at 8:34 a.m. ET. Meanwhile, the GM 30 Index, representing a basket of the top 30 cryptocurrencies, saw a 0.18% increase to 135.66 in the past 24 hours.

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