Bitcoin Spikes To $59K, Retraces The Gains: What Is Going On?
By Benzinga
Bitcoin (CRYPTO: BTC) spiked in early Thursday trading on positive macroeconomic data and strong ETF inflows before falling back below $58,000.
What Happened: U.S. inflation turned negative in June, with the Consumer Price Index (CPI) reporting a negative 0.1% rate for June, against forecasts of a 0.1% gain. This marks a decrease from May’s 0.0% read.
Year-over-year, the CPI increased by 3.0%, slightly below the expected 3.1% and May’s 3.3%. Core CPI, excluding food and energy, rose 0.1% in June, better than the anticipated 0.2%.
Following the CPI report, Bitcoin’s price surged to $59,100 but has since retraced its entire upside move to trade around $57,800 at the time of writing. Whether the move is connected to the German government liquidating its Bitcoin holdings is unclear.
Federal Reserve Chair Jerome Powell, in recent Congressional testimony, acknowledged a weakening labor market and emphasized the need for continued confirmation of inflation returning to the 2% target before considering rate cuts.
Why It Matters: The decline in inflation and subsequent market reactions are part of a broader economic trend. The decline in the CPI marks the third consecutive inflation rate decline, a trend not observed since May 2023.
Bitcoin spot ETFs have been actively buying the dip, with a fresh $147 million in inflows on Wednesday. The iShares Bitcoin Trust (NASDAQ: IBIT) saw inflows of $22 million, while the Fidelity Wise Origin Bitcoin Fund (BATS:FBTC) noted inflows of $57 million.
Adding to the momentum, MicroStrategy (NASDAQ:MSTR) announced a 10-for-1 stock split, which aims to make its shares more accessible to investors and employees.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
