Bitcoin (BTC) Surges Past $64K as U.S. Inflation Plunges to 3.5% in June

Key Highlights

• June’s U.S. inflation reading dropped to 3.5% annually, significantly under the anticipated 3.8% — marking the steepest monthly decline since April 2020
• BTC prices jumped more than 2%, breaking through $63,000 and momentarily reaching $64,000
• Probability of a Federal Reserve interest rate increase at July’s meeting plummeted to 14.4% according to CME FedWatch Tool
• Market participants are closely monitoring the $64,800 resistance level, though some analysts caution about potential lower highs
• Cryptocurrency short positions faced $220 million in liquidations during the 24-hour period after the inflation announcement

Bitcoin surged beyond the $64,000 threshold on Tuesday following a surprisingly benign U.S. inflation report that encouraged bullish sentiment among cryptocurrency traders.

Bitcoin (BTC) Price

June’s Consumer Price Index registered at 3.5% on an annual basis, falling short of the projected 3.8%. The monthly reading showed a 0.4% decline, substantially better than the consensus estimate of -0.1%. Core inflation metrics similarly underperformed expectations, posting 2.6% year-over-year compared to forecasts of 2.8%.

According to data from the U.S. Bureau of Labor Statistics, this represents the most significant single-month CPI reduction observed since April 2020.

Energy costs drove the overall decline, with the energy sector index plunging 5.7% during June following a 3.9% increase the previous month. This occurred despite ongoing geopolitical tensions involving the U.S.-Iran conflict and disruptions to oil shipping routes through the Strait of Hormuz.

The cryptocurrency market reacted swiftly. Bitcoin advanced from its intraday bottom near $62,000 to approximately $63,700, representing a daily increase exceeding 2%. As traditional markets opened, BTC momentarily crossed the $64,000 mark.

Federal Reserve Rate Hike Expectations Collapse

The softer-than-anticipated inflation figures dramatically reduced expectations for monetary tightening. Data from the CME FedWatch Tool indicates just a 14.4% probability of an interest rate increase at the upcoming July Federal Open Market Committee meeting. Meanwhile, decentralized prediction platform Polymarket shows July rate hike chances at merely 7%, down sharply from a recent peak of 34%.

The likelihood of any rate increase occurring throughout 2025 also declined on Polymarket, falling to 55% from a previous high of 71%.

Prominent economist Mohamed El-Erian shared his perspective on X, stating the inflation data “should help temper what had become an excessively hawkish market tilt to the monetary policy outlook.”

According to CoinGlass data, cryptocurrency short position liquidations exceeded $220 million in the day following the inflation release.

Market Analysts Exercise Caution at Key Levels

Despite the upward momentum, technical analysts aren’t declaring a definitive breakout just yet.

Cryptocurrency analyst Daan Crypto Trades observed on X that Bitcoin was “testing the top of its range regardless of all the geopolitics.” He emphasized the necessity for a confirmed closing price above current resistance levels.

Trader Killa identified significant liquidity accumulation above the $64,800 mark but issued a warning: “If we can’t reclaim and hold the weekly open, this is likely just a lower high before we move down to test the $60K region.”

Market analyst Ted highlighted substantial selling pressure at the $65,000 level, suggesting that a decisive break above this threshold could trigger a 5–6% price surge.

Crypto commentator Exitpump acknowledged the short squeeze activity but characterized current conditions as “still a range trading environment.”

The next major catalyst arrives with the upcoming Producer Price Index release, which could introduce additional volatility to Bitcoin’s price trajectory.

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