Bitcoin’s price movement continues to be peculiar, especially in light of the broader macroeconomic outlook. The US Bureau of Labor Statistics recently released the Producer Price Index (PPI) for June, which showed higher inflation than expected. Year-over-year PPI inflation was 2.6% in June, surpassing the anticipated 2.3%. Similarly, the core PPI rose by 3%, exceeding the market consensus of 2.5%.
One might expect this hot inflation data to put selling pressure on BTC. However, Bitcoin’s price has actually rallied by almost 3% since hitting yesterday’s low and is currently trading at $58,300.
As expected, BRC-20 tokens are also rallying due to the strength of BTC. ORDI has seen a nearly 10% increase, while Stacks has surged by almost 10%.
Additionally, a new BRC-20 token called 99BTC is in high demand and has raised close to $2.5 million in its presale. Meanwhile, new Ethereum meme coins like WienerAI are poised for a breakout.
Despite the bad inflation data, the Bitcoin price experienced a significant correction yesterday, dropping by nearly 3% and reaching as low as $56,000. One possible explanation for this correction is that neither the CPI nor the PPI data played a role in Bitcoin’s price trajectory. Instead, the sell-offs from the German government and entities like Genesis and Mt. Gox could have contributed to yesterday’s correction.
However, this theory does not account for the heavy losses suffered by the US stock market post-CPI, with the NASDAQ 100 tumbling down by nearly 3%. Another possibility is that recessionary fears are at play. A mild CPI print, especially following weaker-than-expected ISM Service PMI earlier this month, increases the risk of recession. This could explain why the hot PPI data resulted in a bounce back in equities and Bitcoin.
Lastly, it’s possible that despite appearances, today’s PPI data is actually bullish for stocks and the crypto market. The CME FedWatch tool currently shows that there is a nearly 88% chance of at least one interest rate cut in July.
The Bank of America has explained that although the PPI came out hotter than expected, the items contributing to PCE inflation cooled down in June. The Personal Consumption Expenditure (PCE), which is the Federal Reserve’s preferred inflation metric, showed a different picture. Bank of America has consequently lowered its forecast for core PCE.
Looking ahead, the Bitcoin price is currently trading above the $58,000 mark, putting it within reach of flipping the 200-day SMA and EMA levels, which is a bullish scenario. Additionally, it is forming an inverse Head and Shoulder pattern in the daily timeframe, indicating a potential breakout to $64,000.
BRC-20 tokens, which have a strong correlation with Bitcoin, are experiencing a rally. ORDI and Stacks are among those rallying. Even new Bitcoin beta tokens like 99BTC are in high demand, with 99Bitcoins, a popular crypto education platform, already garnering strong community support. 99BTC has raised close to $2.5 million in its presale, and experts believe it could deliver significant returns after its launch, with some projecting up to 10x gains.
New Ethereum meme coins are also in demand, likely due to the upcoming launch of spot Ethereum ETFs. For example, WienerAI, an AI-powered meme coin, has raised over $7.3 million in its ICO. Smart traders recognize its potential for upside, with some projecting up to 100x gains after its launch. This optimism stems from innovative concepts such as staking rewards and its native AI-enabled Trading Bot. WienerAI is expected to go live in the first week of August, as its presale is scheduled to end by July 31st.
