BTC Surges to $65.5K Three-Week Peak Following Unexpected US Inflation Report
The leading cryptocurrency climbed to its strongest position since June 22 following the release of US PPI inflation figures that marked the week's second unexpected macroeconomic data point.
Bitcoin (BTC) reached price levels not seen in three weeks on Wednesday following the release of US inflation statistics that surpassed market forecasts for the second consecutive day.
Key points:
- Bitcoin experiences similar bullish momentum as United States inflation figures moderate for two days in a row.
- Risk-oriented assets receive improved prospects as Federal Reserve rate-hike probabilities decline.
- Market participants maintain cautious outlook regarding Bitcoin's potential for sustained upward movement.
Bitcoin rallies following "much better-than-expected" US PPI
Information from TradingView indicated BTC/USD touching $65,500 for the initial time since June 22.
The Producer Price Index (PPI) reading for June registered cooler at 5.5% on a year-over-year basis following a 0.3% monthly decline, according to information from the Bureau of Labor Statistics (BLS).
"The June decline in the index for final demand can be attributed to prices for final demand goods, which fell 1.4 percent. In contrast, the index for final demand services moved up 0.2 percent," an official news release stated.
In response, economist Mohamed El-Erian expressed optimism regarding the prospects for risk assets and Federal Reserve policy.
"These much better-than-expected figures are set to boost equities and further temper market expectations for upcoming interest rate hikes," he wrote in a post on X.
PPI accompanied Tuesday's Consumer Price Index (CPI) data release, which came in below expectations despite macroeconomic pressures stemming from the US-Iran war and its influence on oil pricing.
"Inflation expectations continue to decline," trading resource The Kobeissi Letter added, referencing bets on a Fed interest-rate hike from users of prediction service Polymarket.
The most recent information from CME Group's FedWatch Tool also revealed shifting expectations for the Fed's September policy decision, with a 0.25% hike no longer representing the most probable scenario.
BTC price momentum battles bear-market history
When evaluating the current BTC price movement, market participants steered clear of excessively bullish interpretations.
"Liquidity sitting above at the $65.6K mark and most importantly, the $67.2K mark," trader Daan Crypto Trades wrote on X, referring to exchange order-book liquidity.
"Breaking above the latter would turn this into a bigger move and we can start targeting the $70K+ region again and truly position Bitcoin in the middle of its $60K-$80K range."
Trader and analyst Rekt Capital observed that BTC was nearing its 50-month exponential moving average (EMA) — a threshold from which the price should experience rejection if historical bear-market patterns were to replicate themselves.
"If we follow the same statistical pattern seen over the past 12 months, BTC would likely derisk for the remainder of the month and push back down," trader Killa added on the topic.
