BTC stopped below $63,000 before the CPI numbers came out.
Although most experts expected a slight decline in US CPI numbers for June due to the then-ongoing ceasefire in the Middle East, the actual data is more promising, showing a larger decline.
The decrease on a monthly basis amounted to 0.4%, which breaks a series of continuous increases that lasted for three months. BTC price reacted by immediately rising by nearly $1k which took it to $63,500 briefly.
However, a closer look at the data tells a different story. Much of the CPI’s fall from a multi-year record in May was due to a drop in oil prices in June due to a ceasefire signed between the United States and Iran.
The core CPI, which excludes more volatile sectors such as energy and food, remains unchanged. Moreover, the ceasefire between the two warring countries ended last week, and tensions have escalated dramatically. Oil prices jumped again, meaning July data is likely to rise.
According to another analysisBTC traders are closely monitoring the situation as it may offer a glimpse into the upcoming Federal Open Market Committee meeting, at which the Federal Reserve could raise interest rates.
Analysts expected that a reading above 4% y/y could lead to further tightening of monetary policy, negatively impacting Bitcoin. However, the actual figure of 3.5% may have the opposite effect.
Bitcoin’s initial reaction was very positive, with the asset jumping to a daily peak of $63,600 before pulling back slightly. More volatility is expected as news and market prices emerge at the upcoming FOMC meeting.
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