BTC hovers around $64K leaving market participants uncertain as equities rally following mild US PPI figures
BTC pushes closer to $64,000 following milder-than-forecasted US Producer Price Index inflation figures for July, though liquidation of long positions keeps $61,000 in focus.
On Thursday, Bitcoin (BTC) moved away from its weekly lows following the release of US Producer Price Index (PPI) data for July, which showed a modest cooling.
Key points:
- Bitcoin steers clear of additional losses as US PPI figures give a lift to US stock markets.
- Cleveland Fed president maintains hawkish stance regarding the trajectory of interest-rate policy.
- Liquidations of Bitcoin long positions place $61,000 as a critical level for monitoring.
Cooler US inflation trend continues with July PPI
Data from TradingView indicated that BTC/USD had risen approximately 0.5% during the day, trading near $63,900 with relatively limited volatility present.
According to data from the Bureau of Labor Statistics (BLS), the US Producer Price Index (PPI) reading for July remained flat at 0.2% on a month-over-month basis, while the year-over-year figure came in at 4.7% compared to the expected 4.9%.
The BLS release stated, "In July, a 0.2-percent increase in the index for final demand services and a 2.2-percent advance in prices for final demand construction offset a 0.7-percent decrease in the index for final demand goods."
Econoday analysts pointed out that "Falling gasoline and energy prices provided the biggest relief."
Following the opening bell on Wall Street, US equities posted gains as the PPI data further diminished market expectations for additional interest-rate increases from Federal Reserve policymakers. At the time of writing, the S&P 500 index and the tech-heavy Nasdaq Composite index had climbed 0.87% and 0.94%, respectively.
The FedWatch Tool from CME Group indicated 65.6% probability of policymakers maintaining rates at the existing 3.50-3.75% range during the September Federal Open Market Committee (FOMC) meeting. The July Consumer Price Index (CPI) figures released on Wednesday had met expectations, which had already provided a lift to the outlook for a rate pause.
Following the most significant divergence among Fed officials regarding the interest-rate trajectory since 1970 during their July meeting, Federal Reserve officials have maintained a measured approach when discussing policy. During an appearance at an event hosted by the Dayton Area Chamber of Commerce in Kettering, Ohio, Cleveland Federal Reserve Bank president Beth Hammack expressed skepticism about whether the recent milder inflation data would be sufficient to reduce inflation to the Fed's 2% target.
"Maybe we'd get there, but if it takes another three to four years to get there, is that OK? Is that enough?"
Beth Hammack, quoted by Bloomberg
In July, Hammack was among three officials who cast their votes in support of a 0.25% rate hike.
Long position liquidations pose risk for Bitcoin at $61,000
As BTC price action continued to move within a narrow range, market observers turned their focus toward the boundary levels.
Glassnode cofounder Rafael Schultze-Kraft pointed out that $61,000 could emerge as a critical point due to the substantial potential for long position liquidations that would be triggered if the price were to drop to that level.
"Long liquidation risk has built up around $61K in the past weeks. If we get there, I'd expect forced selling to add momentum to the downside,"
Rafael Schultze-Kraft in a Tuesday X post
Earlier, Cointelegraph had covered how $63,000 has emerged as another significant BTC price threshold, with repeated tests of this level raising the probability of support breakdown.
