- Bitcoin rose above $64,000 after weaker US inflation data increased hopes of Federal Reserve rate cuts.
- The rally could continue if BTC breaks above its key 50-day EMA resistance.
Bitcoin climbed back above the $64,000 mark after softer-than-expected US inflation data lifted investor confidence and sparked a broader rally across the crypto market. The latest inflation figures have strengthened expectations that the Federal Reserve could begin cutting interest rates later this year, creating a more favorable backdrop for risk assets.
Bitcoin Rises as Inflation Cools
The cryptocurrency market moved higher after the latest US Consumer Price Index (CPI) report showed inflation eased more than analysts had expected.
According to the latest data, annual inflation slowed to 3.5% in June from 4.2% in May. The reading also came in below the market forecast of 3.8%, marking the first decline in inflation in five months.
Core inflation, which excludes food and energy prices, also fell to 2.6%, beating expectations of 2.8%.
The lower inflation figures increased optimism that the Federal Reserve may begin easing monetary policy if inflation continues to slow. Lower interest rates typically improve liquidity and encourage investors to move into higher-risk assets, including cryptocurrencies.
Crypto Market Extends Gains
Bitcoin gained more than 3% over the past 24 hours to trade above $64,000. The broader crypto market also posted solid gains, with Ethereum, XRP, Solana, meme coins, and privacy-focused cryptocurrencies rising between 3% and 4%.
The improvement in sentiment followed lower energy prices, which helped reduce inflation after a temporary ceasefire between the United States and Iran eased pressure on global oil markets.
Investors are now watching upcoming comments from Federal Reserve Chair Kevin Warsh and the next Federal Open Market Committee (FOMC) meeting for further guidance on interest rate policy.
Bitcoin Faces Key Technical Resistance
Bitcoin’s recovery has improved its short-term outlook, but the price still needs to overcome several important resistance levels before confirming a stronger bullish trend.
After reclaiming $64,000, Bitcoin is trading below its 50-day Exponential Moving Average (EMA), which sits near $65,142. A daily close above this level would strengthen the case for additional upside.
Beyond that, the next major resistance levels are the 100-day EMA near $68,524 and the 200-day EMA around $74,562.
Technical indicators also suggest buying interest is improving. The Relative Strength Index (RSI) has climbed to 62, remaining above the neutral 50 level. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in positive territory, indicating that the recent recovery is still supported by positive price action.
Can Bitcoin Hold Above $64,000?
The $64,004 level has become an important support zone after buyers defended it during the recent rally. Holding above this level could allow Bitcoin to challenge the 50-day EMA in the coming sessions.
However, if buyers fail to push above that resistance, Bitcoin could enter a period of consolidation or retest support before making another attempt to move higher.
For now, softer inflation has given the crypto market a fresh boost. Whether the rally continues may depend on upcoming Federal Reserve signals and Bitcoin’s ability to break through key technical resistance.
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