Bitcoin spiked past $64,000 into Tuesday’s Wall Street open after US inflation data delivered a surprise downturn, lifting risk assets across the board.
Data from TradingView showed BTC/USD gaining more than 2% on the day as the June Consumer Price Index came in below expectations.
CPI drops despite Iran pressure
At 3.5% versus the anticipated 3.8%, CPI posted its largest monthly decline since April 2020, according to the US Bureau of Labor Statistics.
Energy led the fall, even with headwinds from the US-Iran war and the closure of the Strait of Hormuz oil route.
The BLS release noted:
“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.”
Market expectations for future Federal Reserve policy turned dovish, with the odds of rate hikes dropping sharply.
Still, CME Group’s FedWatch Tool held consensus for a 0.25% hike at the Fed’s September meeting.
Economist Mohamed El-Erian wrote on X:
“This print should help temper what had become an excessively hawkish market tilt to the monetary policy outlook.”
Traders wary of rejection
Bitcoin traders stayed cautious with local resistance above $64,000 still in place.
Commentator Exitpump noted short positions getting squeezed after the print:
“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.”
CoinGlass data put 24-hour crypto short liquidations at just over $220 million.
Trader Killa warned the rally could fade if BTC failed to hold the weekly open, pointing to a liquidity pool above $64,800:
“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.”
