Quick Take:

• Soft U.S. inflation and retail sales data ignite crypto rally.
• Bitcoin hits highest price since April 24, with Solana (SOL) and NEAR leading gains.
• Analysts suggest Bitcoin may target $84,000 level as altcoins perform strongly.

Cryptocurrency markets experienced a notable surge on Wednesday fueled by softer-than-expected U.S. inflation data, prompting digital assets to break out of their recent stagnation.

Bitcoin (BTC) soared past the $66,000 mark, marking its highest price level since April 24 and recording a significant 7% increase over the past 24 hours. Meanwhile, Ether (ETH) traded near $3,000 but exhibited a more modest 4% advance during the same period.

Leading the charge among major cryptocurrencies were Solana (SOL) and NEAR Protocol (NEAR), boasting impressive gains of 8% and 12%, respectively. The broader market benchmark CoinDesk 20 Index (CD20) also saw a robust uptrend, rising by 6%.

The rally was spurred by the release of April’s U.S. Consumer Price Index (CPI) figures, which showed a slight decrease from March, coupled with a tepid retail sales report. Investors interpreted these data points as a positive signal, alleviating concerns of rapid inflation and an overheated economy, which could prompt the Federal Reserve to reconsider its accommodative monetary policy stance.

Analysts at Bitfinex characterized the CPI decline as a “bullish regime shift,” highlighting its significance as the first decrease in inflation over the past three months. Coupled with the Federal Reserve’s commitment to tapering its balance sheet run-off, the data was perceived favorably by market participants, particularly for risk assets like cryptocurrencies.

In traditional markets, U.S. equities mirrored the upward trajectory of crypto assets, with the S&P 500 index surging by over 1% and reaching a fresh all-time high, signaling a resurgence in risk appetite among investors.

The surge in Bitcoin prices also marked a significant breakout from a downtrend that had constrained prices in recent weeks, according to analysts at Swissblock. Referring to the CPI and retail sales figures, Swissblock analysts noted that Bitcoin was finally making a substantial move, suggesting the emergence of a larger market structure since the March high.

Looking ahead, analysts speculate that Bitcoin could target the $84,000 level as the broader crypto market continues to exhibit strength. With altcoins also demonstrating resilience and outperforming expectations, the overall sentiment remains optimistic, signaling potential further upside for digital assets in the near term.