Bitcoin Jumps on Lowest US CPI Since 2020 as Traders Stay Wary of $64K Failure
Vexoda Newsroom
US inflation data showed a significant drop, pushing Bitcoin prices above $64,000. However, traders remain cautious due to resistance at this level.
Bitcoin (BTC) surged past the critical $64,000 mark on Tuesday as US Consumer Price Index (CPI) readings revealed a substantial decline from expectations, marking the lowest inflation rate since April 2020. This unexpected dip in CPI provided a boost to risk assets and crypto markets.
The June CPI reading came in at 3.5%, significantly lower than the anticipated 3.8%. Energy prices saw a notable drop of 5.7% despite geopolitical tensions with Iran, which had initially suggested potential supply disruptions through the Strait of Hormuz. This unexpected decline in inflation rates signaled a more dovish stance from monetary policymakers.
Traders reacted cautiously to this development, given that resistance at $64,000 remained unbroken. The market maintained a range-bound trading environment with short positions being squeezed due to strong passive demand. Market analysis indicated that 24-hour crypto short liquidations amounted to over $220 million.
The relief in inflationary pressures led to a positive reaction across risk assets, including US stocks and cryptocurrencies like Ethereum (ETH). The Federal Reserve’s monetary policy outlook also shifted towards a more dovish stance, reducing the odds of interest-rate hikes. However, traders remained vigilant as they awaited confirmation that $64,000 resistance could be broken.
Analysts warned that any breakout above this level would need to hold and maintain support at weekly open levels around $64,800 to avoid a potential retest of the lower $60K region. The broader implications suggest that while short-term positive sentiment persists, long-term traders will continue to monitor key resistance points closely.
Going forward, investors should focus on upcoming economic data releases and Federal Reserve statements for further clarity on monetary policy direction. Additionally, specific crypto asset performance could provide insights into the overall market mood.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.