US Inflation Cool-Down Keeps Bitcoin Guessing Near $64K

Bitcoin (BTC) edged away from weekly lows, recording modest gains alongside US stocks, as July Producer Price Index (PPI) data reinforced a cooling inflation trend and softened market expectations for aggressive Federal Reserve rate hikes.

Fed Rate Hike Bets Soften Following Data Release

According to the Bureau of Labor Statistics (BLS), the July PPI print remained unchanged month-on-month at 0.2%, while the year-on-year increase hit 4.7%, falling short of the anticipated 4.9%. Falling gasoline and energy prices provided significant relief to the inflation metrics.

■CME Group’s FedWatch Tool indicates 65.6% odds that policymakers will hold rates steady at the current 3.50-3.75% level during the September FOMC meeting.

■Cleveland Federal Reserve Bank President Beth Hammack struck a cautious tone, questioning whether recent data is sufficient to reach the 2% inflation target.

■US stocks rallied at the open, with the S&P 500 up 0.87% and the tech-heavy Nasdaq Composite gaining 0.94%.

Critical Support Levels and Liquidation Risks

With BTC price action continuing within a tight range, market participants focused their attention on liquidity extremes. Rafael Schultze-Kraft, cofounder of on-chain analytics platform Glassnode, highlighted a significant risk area in the market structure.

■BTC/USD climbed approximately 0.5% on the day to trade near $63,900, with volatility broadly absent.

■Analysts suggest that $61,000 could become a flashpoint due to the concentration of long liquidations.

■Repeated retests of the $63,000 level have increased the odds of support failure.

While the softer macro data boosts short-term risk appetite, the tight price range in Bitcoin and the accumulation of long liquidation risks around $61,000 suggest the market remains vulnerable to volatility. The reluctance of Fed officials to fully drop their hawkish stance implies that caution is warranted regarding the sustainability of the current rally.