June CPI Data Ignites Bitcoin & Crypto Rally as Fed Rate Decision Looms

Markets roar back to life as inflation cools—just in time for another Fed guessing game.

Bitcoin leads the charge with a 9% surge, while altcoins ride the wave of speculative euphoria. Traders pile in ahead of what could be the first rate cut in over a year—or yet another 'higher for longer' headfake.

The Fed's favorite inflation metric shows cracks. CPI prints at 3.1%, barely edging past expectations. Cue the classic crypto overreaction: 'This changes everything!' (Spoiler: It never does.)

Powell & Co. now face their favorite dilemma—sound hawkish to tame markets, or blink and trigger a full-blown risk asset melt-up. Meanwhile, crypto degens are already leveraging long—because nothing says 'prudent investing' like 100x positions on macroeconomic noise.

One cynical truth remains: Wall Street will spin this as 'clarity' either way. Bullish? Rate cuts incoming. Bearish? Inflation stubborn. The only certainty? Trading fees are about to print.

In brief

• Bitcoin and major altcoins gained momentum following the release of June’s U.S. CPI data.
• June’s CPI showed inflation rose 2.7% year over year, slightly higher than May’s 2.4%, while core CPI reached 2.9%.
• Institutional interest increased, with significant inflows into U.S. spot Bitcoin ETFs and Ethereum funds.

Bitcoin Bounces Back After Dip

Prior to the release of the CPI data, Bitcoin had slipped below $116,000, but it has since recovered following the report. Analyst Ali Martinez noted that Bitcoin often dips before inflation data is released and then rallies once the report comes out. This week followed that same pattern. Bitcoin has since climbed above $118,000.

Price growth picked up again in June. Headline inflation reached 2.7% over the past year, slightly higher than May’s 2.4%. That made it the strongest yearly rise since February. Core inflation, which leaves out food and fuel, came in at 2.9%, just under market forecasts. On a monthly basis, overall prices rose 0.3%, and core prices moved up by 0.2%.

The inflation figures gave investors some relief, suggesting that price increases weren’t sharp enough to stop the Fed from considering a rate cut. The market reacted quickly, with crypto prices rising across the board.

Strong Inflows and Rising Prices Signal Growing Confidence in Crypto

Bitcoin wasn’t the only coin moving higher. Ethereum jumped by more than 6% over the past 24 hours. XRP, Binance Coin (BNB), Solana, and Dogecoin also moved up. XRP rose by 3%, BNB by 2.4%, and both Solana and Dogecoin gained 5%.

Eugene Cheung, chief commercial officer at OSL, viewed the latest figures as a positive signal for digital assets, as they also raised the likelihood of a Fed rate cut in September—a MOVE that could attract more capital into the crypto market.

That outlook appears to be taking shape. According to Glassnode, Monday recorded one of the largest single-day inflows into U.S. spot bitcoin ETFs in three months. Over 7,500 BTC was added, and the momentum continued into Tuesday with an additional 3,400 BTC. During this period, outflows remained minimal, suggesting strong investor confidence.

Ethereum funds also had a strong showing. Inflows totalled $192 million, marking eight straight days of gains. That consistent buying reflects strong confidence in the market.

Inflation, Fed Moves, and What’s Next for Bitcoin

Even with prices rising, the market isn’t getting ahead of itself. Investors remain cautious, awaiting more data to clarify inflation’s path. While the June CPI report offered some reassurance, uncertainty lingers about how the Federal Reserve will act at its July FOMC meeting.

Market odds still lean toward a rate cut in September, with CME FedWatch placing the likelihood at around 54%. However, the next key data release—the PPI—could shift market expectations. If the PPI reports inflation below predictions, Bitcoin could gain momentum and lift the broader crypto market. However, if the PPI shows stronger inflation, prices may pull back.

For now, the broader trend remains upward. Bitcoin has held steady through recent swings, and momentum is slowly building again. But much depends on how the next economic reports unfold.

Nick Ruck, director at LVRG Research, sees more room for prices to grow. He believes the current rally still has momentum and expects stronger gains in the second half of the year. This view aligns with analysts at Bernstein, who remain among the most bullish. They’ve suggested that if market conditions stay supportive, Bitcoin could reach as high as $200,000 before the year ends.

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