What Lies Ahead as Bitcoin Price Surges Past 58000 Despite High PPI Inflation
Bitcoin’s price continues its erratic movements, a phenomenon amplified against the backdrop of broader economic conditions. In June, the US Bureau of Labor Statistics revealed a surprising uptick in the Producer Price Index (PPI). Year-over-year inflation stood at 2.6%, surpassing expectations of 2.3%, with the core PPI rising even higher at 3%, exceeding the market consensus of 2.5%.
Despite this inflationary pressure, Bitcoin managed to rally by nearly 3% from yesterday’s low, now trading at $58,300.
As expected, BRC-20 tokens surged alongside Bitcoin’s strength. ORDI saw a gain of close to 10%, paralleled by Stacks, which also surged by almost 10%. Additionally, the newly launched BRC-20 token, 99BTC, garnered significant attention, raising approximately $2.5 million during its presale phase. Meanwhile, emerging Ethereum meme coins like WienerAI are positioned for significant market breakthroughs.
Despite unfavorable inflation data, why has Bitcoin’s price risen?
Bitcoin faced a substantial correction recently, despite a positive Consumer Price Index report. The correction saw BTC drop nearly 3%, hitting a low of $56,000.
One plausible explanation is that neither CPI nor PPI data directly influenced Bitcoin’s trajectory. Rather, ongoing sell-offs by entities such as the German government, Genesis, and Mt. Gox likely triggered the recent correction. However, this theory fails to account for the significant losses observed in the US stock market post-CPI, with the NASDAQ 100 plummeting nearly 3%.
Another consideration is the looming specter of a recession. A tepid CPI report, following weaker-than-anticipated ISM Service PMI earlier in the month, heightens recessionary concerns. This context explains the resurgence in equities and Bitcoin following the PPI uptick.
Moreover, despite initial appearances, today’s PPI data might actually be bullish for both stocks and the crypto market. Notably, the CME FedWatch tool now indicates an 88% probability of at least one rate cut in July.
Bank of America suggests that while the PPI exceeded expectations, factors influencing Personal Consumption Expenditure (PCE) inflation cooled in June. PCE remains a crucial metric for the Federal Reserve.
What lies ahead for Bitcoin?
Currently trading above $58,000, Bitcoin is poised to challenge the 200-day SMA and EMA levels, signaling a bullish trend.
Additionally, Bitcoin is forming an inverse Head and Shoulders pattern on the daily chart, indicating a potential breakout towards $64,000.
BRC-20 Tokens and Ethereum Meme Coins Surge
BRC-20 tokens continue to show a strong correlation with Bitcoin. Consequently, ORDI and Stacks are experiencing substantial rallies. Newcomer 99BTC, associated with the popular crypto education platform 99Bitcoins boasting 3 million subscribers, has already garnered strong community support. Its presale has raised approximately $2.5 million, with analysts predicting significant returns post-launch, possibly up to 10x.
Similarly, new Ethereum meme coins are attracting considerable interest, likely fueled by the impending launch of spot Ethereum ETFs next week. For instance, WienerAI, an AI-powered meme coin, has raised over $7.3 million in its ICO. Early adopters foresee substantial gains, with projections of up to 100x returns post-launch. The enthusiasm for WienerAI centers on innovative features like staking rewards and its native AI-driven Trading Bot.
WienerAI is scheduled to go live in early August, following the conclusion of its presale on July 31st.
