Bitcoin price jumped to $64,000 today, July 14, after the US published lower-than-expected inflation data. It has now risen by 11% from its lowest point this year. Still, it is facing some substantial risks of a reversal in the near term.
Bitcoin Price Jumps After US CPI Data
BTC and the crypto market jumped after a report showed that the headline and core inflation improved in the United States. According to the Bureau of Labor Statistics (BLS), the headline CPI contracted by 0.1% in June after growing by 0.5% in the previous month. This contraction translated to an annual growth of 3.5%, lower than the expected 3.8% and the previous month’s 4.2%.
Core inflation, which excludes the volatile food and energy prices also continued falling, moving from 2.9% in May to 2.6% in June. Analysts were expecting the report to show that the core figure dropped to 2.8%.
These numbers are important because they came a week after the US released a weak non-farm payrolls (NFP) report. This report revealed that the economy added just 57k jobs, missing the expected 114k.
Therefore, these numbers mean that the Federal Reserve will not have the urgent to hike interest rates as Christopher Waller warned. In a statement on Monday, Waller warned that the bank would be forced to hike interest rates if inflation remained stubbornly high.
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Bitcoin and Crypto Face Some Key Risks
BTC price faces some major risks ahead. For one, inflation may bounce back in the near term, especially if the ongoing US-Iran war escalates. The two sides have continued fighting this week, pushing crude oil prices higher. Brent and WTI have jumped to over $80 today, with gasoline prices expected to rebound in the near term.
As a result, there is still a risk that the Fed will hike interest rates later this year. Odds of a rate hike remain above 50% since inflation has remained above 2% for more than five years.
Bitcoin is also seeing increased selling from American investors. Spot Bitcoin ETFs had over $400 million in outflows on Monday. This means that, despite having inflows in the first days of the month, Bitcoin funds have now dumped assets worth over $300 million this month. That is a sign that demand among US investors is fading.
Meanwhile, Bitcoin treasury companies are starting to sell their coins. Strategy has already dumped assets worth over $200 million, while Empery sold 1,400 coins. Companies like Riot Platforms, Cleanspark, and MARA Holdings may start selling their coins during their pivot to AI.
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