Bitcoin price surged 5% to $65,000 following the release of Consumer Price Index (CPI) data, sparking speculation of a potential breakout from its current range.

The Bitcoin (BTC) price surged by more than 5% back to the $65,000 level on Wednesday, spurred by US Consumer Price Index (CPI) data showing a moderation in price pressures in April, which supported expectations that the Federal Reserve will be able to reduce interest rates several times before the end of 2024.The surge in the Bitcoin price coincided with a 0.9% jump to new all-time highs for the S&P 500. Meanwhile, US bond yields and the US Dollar Index slumped to one-month lows.Traders are increasingly confident that there will be at least one reduction in interest rates by September, with data from the Chicago Mercantile Exchange (CME) indicating a 71% probability of this occurring. This probability had previously been around 65% just a day ago.Bitcoin is currently facing a crucial technical barrier in the form of its 50-day moving average (DMA) at $65,166. If the price can break above this level and its May highs around $65,500, further short-term upside could follow. The next significant level to watch will be the late-April highs around $67,000, with potential for a retest of yearly highs in the $73,000 range.Concerns about a gradual rise in inflation in the first quarter of 2024 had previously weighed heavily on Bitcoin in recent months. Sticky inflation at the beginning of the year compelled markets to anticipate aggressive reductions in Federal Reserve interest rates. This was likely the primary reason for the stall in Bitcoin's price after it reached new record highs near $74,000 ahead of the upcoming halving event.Since then, the cryptocurrency has remained within a consolidation range, trading primarily between $60,000 and $70,000. However, the latest inflation report suggests that the Q1 inflation surge is unlikely to persist. If concerns about inflation abate from here on out, it could potentially shift from being a headwind to Bitcoin to becoming a tailwind in the medium term.While the outlook remains uncertain, historical data suggests that May has not been a favorable month for Bitcoin in recent years. Statistics from bitcoinmonthlyreturn.com indicate that the cryptocurrency experienced declines of 35%, 15.5%, and 7% in 2021, 2022, and 2023, respectively. Similarly, research from Steno Research suggests that Bitcoin has historically performed poorly during the middle months of the year over the past five years. Additionally, post-halving rallies typically emerge 4-6 months after the halving event. Given these historical patterns, a significant upward movement in Bitcoin price is unlikely before August of this year.However, the unique circumstances of 2024, with an impending election, could potentially disrupt this trend. Historically, markets tend to experience rallies in the lead-up to elections, often breaking out of their typical bearish summer conditions. This possibility adds an additional layer of uncertainty to the outlook for Bitcoin in the coming months.Despite the existing risks, the long-term price potential for Bitcoin remains strongly positive. Interest rate reductions, the upcoming halving event, continued government spending, and increased demand for spot Bitcoin exchange-traded funds (ETFs) are factors that could potentially drive BTC above $100,000 in 2024 or 2025.