In the evening, the U.S. June CPI data series all came in significantly below market expectations. The unadjusted CPI year-over-year rate was 3.5%, lower than the expected 3.8% and the prior value of 4.2%; the seasonally adjusted CPI month-over-month rate recorded -0.4%, while the core CPI month-over-month rate held steady at 0%. The core CPI year-over-year rate fell to 2.6%. With all four inflation readings cooling in tandem, the overall picture clearly became a tailwind for risk assets, directly flipping the bearish environment that had been weighing on Bitcoin.

Previously, the U.S.-Iran geopolitical conflict had pushed oil prices higher, and hawkish remarks from Federal Reserve officials added pressure. At one point, the market worried that energy would again stoke inflation, causing rate-hike expectations to keep climbing. The U.S. dollar and U.S. Treasury yields strengthened, and non-yielding risk assets such as Bitcoin continued to face pressure and pull back. But this CPI coming in much weaker dispelled the possibility that the Fed would restart rate hikes in the summer. The market began pricing in the subsequent rate-cut cycle in advance; the dollar and real yields on U.S. Treasuries fell in tandem, lowering the cost of holding Bitcoin. Safe-haven funds started flowing from the U.S. dollar back into the crypto market, and the bearish logic brought about by the oil-price rally was completely disproven.

From a technical perspective, Bitcoin had previously been building up and consolidating in a low-range, essentially waiting for inflation data to provide directional guidance. Once the inflation data was released, the market saw fundamental tailwinds provide support. In the short term, resistance still looks to be the dense-transaction-volume zone at $64,300–$64,500. If price can stand firm in that range with increased volume, it may then be able to further test $65,800 as a mid-term major resistance. Downside short-term support sits at $62,600. As long as this key level holds, this pullback can be declared to have ended at the phase level, allowing Bitcoin to return to the rebound-and-repair channel.

Overall, Middle East geopolitical developments have only brought short-term market volatility. The core mainline of this market is still the Federal Reserve’s monetary policy. CPI cooling has opened up rebound space for Bitcoin, and going forward the market will continue to follow through on a repair trend supported by rate-cut expectations. In terms of execution, you can take positions by following the favorable-news timing, while strictly setting stop-losses to guard against the risk of choppy price action caused by short-term spikes followed by pullbacks. $BTC $ETH $SOL