Bitcoin ($BTC) Wall Street’s opening price soared above $64,000 on Tuesday as U.S. inflation took a sudden and unexpected decline.
Important points:
- Bitcoin has returned near the upper end of its local trading range following US inflation data.
- The biggest CPI drop since April 2020 has boosted crypto and risk assets.
- Traders remain on the lookout to see if local resistance will crumble.
US CPI plummets in defiance of Iranian pressure
Data from TradingView displayed $BTC/USD rose more than 2% on the day as the consumer price index (CPI) for June was lower than expected.
$BTC/USD 1 hour chart. Source: Cointelegraph/TradingView
According to data from the U.S. Bureau of Labor Statistics (BLS), the CPI fell 3.5%, compared to an expected 3.8%, marking the largest monthly decline since April 2020. Energy led the decline despite headwinds from the US-Iran war and the closure of the Strait of Hormuz oil route.
“The energy index fell 5.7% in June after rising 3.9% in May, 3.8% in April and 10.9% in March.” Official news release said.
“The energy index was the largest contributor to the monthly decline in all items, more than offsetting increases in other indexes such as housing and food.”
12-month % change in US CPI. Source: BLS
Risk assets reacted positively, with green stocks and crypto US stocks showing particular comfort.
Market expectations for future monetary policy changes by the US Federal Reserve have also become more dovish, and the probability of an interest rate hike has fallen significantly. CME Group’s latest data fedwatch tool Still, the Fed maintained its consensus for a 0.25% rate hike at its September meeting.
Fed target interest rate probability (screenshot). Source: CME Group
“This print should help soften the overly hawkish market tilt on the monetary policy outlook,” economist Mohamed El-Erian wrote. Reply with X.
Traders warn: $BTC price refusal
Bitcoin traders remained cautious Local resistance exceeds $64,000 Still in place.
Related: Trader predicts Bitcoin bear market will bottom when 2-month RSI indicator hits zero
in Continuous market analysisX commentator Exitpump noted that short positions are being “squeezed” as a result of the CPI print.
“Strong passive demand has prevented sellers from lowering the price, and short sales are now slowly closing out, forcing prices higher,” the report summarized.
“It’s still a range trading environment.”
$BTC/USD 1 day chart. Source: Exitpump/X
The latest data is coin glass Cryptocurrency short liquidation in a 24-hour period is estimated to be over $220 million.
$BTC/USD and crypto liquidation (screenshot). Source: Coin Glass
Trader Kira went on to say that he would be watching for “signs of depletion” if the economy worsens. $BTC Prices are less local high prices.
“The liquidity pool is still above $64,800, but we are currently testing the weekly open price. Unless we are able to recover and hold the weekly open price, this will likely only lower the previous high before moving down to test the $64,000 area,” Posted by X read.
