The digital asset market received a powerful catalyst. The release of June US Consumer Price Index (CPI) data triggered a sharp, yet, as it turned out, sustained rise in Bitcoin. The leading cryptocurrency not only broke through the $65,000 mark but also managed to hold onto most of its gains, indicating the fundamental strength of the current momentum.
At the time of analysis, the asset is trading near $65,340, showing a daily increase of 2%. However, the key point is the reaction to the macroeconomic trigger. Annual inflation slowed from 4.2% to 3.5%, significantly beating the consensus forecast of 3.8%. Core CPI, which excludes volatile food and energy prices, also fell from 2.9% to 2.6%.
Instant Reaction and Speculative Surge
Bitcoin prices reacted instantly: within minutes, the asset surged from $62,000 to $64,900. Ethereum also jumped over 4%, reaching $1,933. Analysis of order flow shows that in the first hour after the data release, the volume of purchases on Binance exceeded $1.2 billion. A surge in activity was also recorded on other major platforms — OKX ($23.6 million) and Deribit ($15 million).
It is important to emphasize that this movement is predominantly speculative in nature. The rise was driven by an aggressive influx of buyers into the derivatives market, rather than the formation of a sustainable long-term trend. Traders are playing on volatility, and the current dynamics are a classic reaction to a reduced probability of monetary policy tightening.
Fed Rhetoric and Changing Probabilities
The speech by the new Fed Chairman Kevin Warsh before Congress added intrigue. On one hand, he acknowledged that artificial intelligence could act as a disinflationary factor for the economy. On the other, he made it clear that the regulator is not ready to declare victory over inflation. His phrase "Mission accomplished, all good? I don't think so" is a clear signal to the market not to get complacent.
Nevertheless, markets drew their own conclusions. The probability of a key rate hike at the July 28-29 meeting dropped sharply — from 42% to 12.3%. This became the main driver for risky assets.
Institutional Return: ETFs Back in the Green
Against the backdrop of macroeconomic optimism, capital inflows into spot Bitcoin ETFs resumed. On July 14, net inflows totaled $181 million, fully offsetting the $425 million outflow from the previous day. The lion's share of funds ($139 million) went to BlackRock's IBIT fund. Ethereum funds also showed positive dynamics, attracting $58.34 million, with the entire volume coming exclusively from BlackRock's ETF.
It is worth noting that since the beginning of July, ETF flows have remained extremely volatile, alternating every few days. This indicates a lack of consensus among institutional investors regarding the short-term direction of the market.
My comment: The market got a breather, but it's not "all clear." The decline in inflation is positive, but it does not eliminate the geopolitical risks that previously crashed Bitcoin to $61,700. Until we see a sustained trend in ETFs and clear signals from the Fed, any rallies will be corrective in nature. The key resistance level now is $66,000, and breaking through it would be the first sign of a shift in sentiment.