Bulls Rally as US Inflation Data Supports Bitcoin
Bitcoin triggered a sharp bounce early on June 12 before extending gains, scrambling toward the $107,000 mark previously anticipated for the day as US inflation data signaled a possible Federal Reserve rate cut this year.
Slowing US Inflation Sparks Bitcoin Recovery
Data released on June 11 showed the Producer Price Index (PPI) rising less than expected, marking the lowest increase since September 2024. This followed similarly positive Consumer Price Index (CPI) data the day prior, forming a “double tailwind” for risk assets.
BTC/USD bucked a day of downside after reaching $106,600 on Bitstamp.
Cooling inflation underpins expectations that the Federal Reserve might accelerate its rate cutting cycle, boosting liquidity inflows into crypto and other risk assets.
US PPI beat sparks Bitcoin relief bounce
The US dollar weakened further as the inflation data challenged expectations of sustained strength.
US dollar index (DXY) dropped to its lowest levels since March 2022.
Fed target rate probabilities (screenshot).
Fed Rate Expectations Shift
According to the latest CME Group’s FedWatch Tool, markets now price in a rate cut as early as September. The Federal Open Market Committee (FOMC) meeting scheduled for June 18 shows no rate change expected.
“Cooling inflation notionally gives the Federal Reserve room to lower interest rates faster and sooner,” analysts commented.
The Fed’s stance for 2025 has remained hawkish, despite calls for rate cuts from figures like former President Donald Trump.
Analyst Views and Trading Action
Trading firm QCP Capital stated its focus was on the US-China trade deal, while concluding that the overall macro trend favored crypto bulls.
“Despite a modest pullback, macro conditions remain constructive for further institutional engagement and capital deployment into digital assets,” QCP Capital reported.
Meanwhile, after a nearly $4,000 drop in a single day, BTC traders remained uncertain about immediate price direction.
“At this point I’m fairly certain that if price breaks either the current monthly high or low, that it will keep trending that direction for the rest of June… Eyes on those levels.” – Daan Crypto Trades
Crypto traders are eyeing critical support around $106-107,000 and projecting new all-time highs could approach $116,000 by month-end.
Key Technical Levels Watched
Analysts and traders are particularly watching price action relative to the $107,000 zone:
“As of now, structure is still bullish. Bitcoin rejected local supply & is now pushing into demand around 106-107K.” – Killa
Killa described this level as “quite a important level in terms of market structure,” warning of potential blowouts below if held.
BTC/USD chart.
