BTC Surges Past $64K as US Inflation Hits Multi-Year Low Despite $64K Resistance Concerns
Bitcoin and cryptocurrency markets rally following unexpected decline in US CPI inflation, while market participants assess resistance levels near $64,000.
Bitcoin (BTC) rallied beyond the $64,000 threshold as Tuesday's Wall Street trading session commenced, driven by an unexpected decline in US inflation figures.
Key points:
- BTC climbs back toward the upper boundary of its recent trading corridor following US inflation report.
- CPI records its most significant decline since April 2020, providing support for cryptocurrency and risk-oriented assets.
- Market participants adopt a cautious stance regarding potential breakthrough of nearby resistance levels.
US CPI ignores Iran pressure with snap drop
TradingView data revealed BTC/USD experiencing gains exceeding 2% during the trading day as the June Consumer Price Index (CPI) reading arrived below market forecasts.
Coming in at 3.5% compared to the projected 3.8%, the CPI figure represented its most substantial monthly decrease since April 2020, according to information from the US Bureau of Labor Statistics (BLS). The energy sector spearheaded the decline despite challenges stemming from the US-Iran conflict and the blockage of the Strait of Hormuz petroleum shipping route.
"The index for energy fell 5.7 percent in June after rising 3.9 percent in May, 3.8 percent in April, and 10.9 percent in March," an official news release stated.
"The energy index was the largest contributor to the monthly all items decrease, more than offsetting increases in other indexes including those for shelter and food."
Assets characterized by higher risk profiles responded favorably, with equity markets in the United States trading higher and digital currency markets displaying notable strength.
Market projections regarding upcoming Federal Reserve monetary policy adjustments also shifted toward a more accommodative stance, with the probability of interest-rate increases declining substantially. However, the most recent information from CME Group's FedWatch Tool continued to indicate majority expectations for a 0.25% rate increase at the Federal Reserve's September policy meeting.
"This print should help temper what had become an excessively hawkish market tilt to the monetary policy outlook," economist Mohamed El-Erian wrote in a response on X.
Trader warns of BTC price rejection
Market participants trading Bitcoin maintained a cautious approach with nearby resistance positioned above the $64,000 level continuing to hold firm.
Through continuous market commentary, X commentator Exitpump observed short positions experiencing a "squeeze" as a consequence of the CPI data release.
"Sellers haven't been able to push price lower because of strong passive demand and now seeing shorts closing out slowly forcing price to grind up," it summarized.
"Still a range trading environment."
The most recent information from CoinGlass placed cryptocurrency short position liquidations over a 24-hour period at slightly above $220 million.
In additional commentary, trader Killa indicated they would monitor for "signs of exhaustion" in the event that Bitcoin's price breaches the nearby peak levels.
"There's still a liquidity pool sitting above 64.8K, but right now we're testing the weekly open. If we can't reclaim and hold the weekly open, this is likely just a lower high before we move down to test the $60K region," an X post read.