Bitcoin (BTC) Price Bolts Briefly Back Above $59,000 as Soft US CPI Data Bolster Fed Rate Cut Bets

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Joel Frank

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Joel Frank

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Since graduating with a degree in economics from the University of Birmingham in 2018, Joel has worked as a financial market/cryptocurrency analyst. He firmly believes that emerging crypto technology...

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July 11, 2024 09:31 EDT

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The Bitcoin (BTC) price briefly bolted back to the north of $59,000 following softer-than-expected that boosted hopes that the Fed will start cutting interest rate by the end of summer.

🚨 Just In: June US CPI annual inflation rises 3.0%, below expectations for 3.1%.

Core CPI inflation increased 3.3% Y/Y, compared to forecasts for a gain of 3.4%.

Looks like a September rate cut is coming. pic.twitter.com/q5WGZlgmaK

— Jesse Cohen (@JesseCohenInv) July 11, 2024

Both the headline and Core metrics printed below economist expectations, coming in at 3.0% and 3.3% respectively.

That has bolstered bets that the Fed will start cutting interest rates in September.

As per the CME’s Fed Watch Tool, the implied probably of at least one 25 bps rate cut from the Fed by September was last close to 90%.

That’s up from under 75% just one day ago, and only around 50% one month ago.

The softer-than-anticipated inflation figures come on the heels of comments from Fed Chair Jerome Powell earlier in the week.

Fed Chief Jerome Powell keeps hopes alive of a rate cut in September as he says, ‘Fed can cut rates before inflation hits 2%’! @reematendulkar #MarketCues pic.twitter.com/GASpvsy8Hg

— CNBC-TV18 (@CNBCTV18News) July 11, 2024

Those comments were interpreted dovishly by the market, with major US equity indices vaulting to new record highs.

The Bitcoin price was last changing hands in the upper $58,000s.

Sellers are coming in once again as Bitcoin attempts to push back above its 200DMA, which is almost exactly at $59,000.

Where Next for the Bitcoin Price?

As it battles to break above $59,000, the Bitcoin bulls face a key hurdle.

The break below the 200DMA earlier this month was a concerning sign that the bull market may be coming to a premature end.

But many analysts remain confident that the downside, which saw the Bitcoin price dip as low as the $53,000s, would be temporary.

That’s because much of the sell pressure driving BTC price downside – i.e. from the German government, miners and Mt Gox creditors – is viewed as temporary.

All the while, macro has become a stronger and stronger headwind.

That’s not just as Fed rate cut bets rise, but also as the likelihood of a pro-crypto Trump presidency rises.

News broke on Thursday that US ex-President Trump is scheduled to speak at the Nashville Bitcoin conference.

Traders will be closely monitoring to see whether Bitcoin can push back above $59,000 and retake $60,000.

That could send a signal that the recent break below the 200DMA had been a “fake out”.

Bitcoin is also eyeing a break out from its downtrend from the June highs.

That wouldn’t mean that a surge to record highs would be imminent.

Sell pressure from miners and Mt Gox creditors could linger for some time.

But as summer comes to an end and bullish narratives build in the background, the Bitcoin price could be shaping up for a swift surge towards $100,000 in the latter stages of 2024.