Bitcoin climbs above $64,000 as US CPI slows to 3.5%

Bitcoin surged past $64,000 on Tuesday after the U.S. Consumer Price Index fell to 3.5%, the sharpest monthly slowdown since April 2020, instantly lifting the crypto market and prompting massive short squeezes. The move matters because it revives expectations of earlier Federal Reserve rate cuts, a tailwind for risk assets like Bitcoin.

Inflation data fuels the breakout

The June CPI print came in at 3.5% year‑over‑year, well below the 3.8% consensus and marking the largest monthly decline in six years【1】. The drop was driven primarily by a 5.7% fall in the energy index, which offset gains in shelter and food costs【3】. The softer inflation reading lowered Treasury yields, weakened the dollar, and nudged equities higher, creating a risk‑on environment that lifted Bitcoin and other crypto assets【2】. In the hour after the release, short positions were liquidated for roughly $135 million according to one source and just over $220 million according to another, indicating a strong short squeeze that amplified the price rise【1】【3】.

Market context and on‑chain dynamics

Bitcoin’s advance sits near the top of its recent $61,600‑$64,700 range, having bounced from a low of $61,600 on July 13 to a high of $64,400 earlier this week【2】. Technical indicators on the 4‑hour chart show bullish momentum, with a MACD golden cross and EMA50 support at $63,220【4】, while the RSI sits at 63.3, leaving room before overbought conditions emerge【4】. The price now tests local resistance just above $64,000; failure to hold could see a pullback toward the $60K region, whereas a hold would confirm the breakout【3】.

Rate‑cut expectations and sentiment

The CPI slowdown strengthens the case for an earlier Fed rate cut, as lower inflation reduces the need for further tightening. Market participants have already priced a two‑in‑three chance that the Fed will hold rates in the July meeting, with the remainder betting on a quarter‑point hike【2】. A dovish shift could keep the dollar subdued and sustain crypto’s upside, while any resurgence in energy prices or a hotter CPI reading could reverse the rally quickly【2】.

What to watch

• $64,000 resistance – a break above this level could open the $65‑$68 K zone; a rejection may trigger a test of $60‑$61 K support.
• Upcoming Fed meetings – the July 28‑29 decision and the September policy meeting could reshape rate‑cut expectations.
• Short‑liquidation activity – monitoring 24‑hour short liquidation volumes (currently $135‑$220 M) will indicate whether buying pressure is driven by forced closures or fresh demand.

The price action shows how quickly macro data can translate into crypto market moves, but the durability of Bitcoin’s rally hinges on whether inflation continues to ease and rate‑cut expectations solidify.