Bitcoin rose about 2.5% to trade near $62,410 after the latest U.S. inflation data met expectations, helping ease concerns about a more aggressive Federal Reserve stance.
Inflation data lifts sentiment
The U.S. Consumer Price Index increased 4.2% year over year in May, marking the fastest pace in more than three years, according to the Bureau of Labor Statistics. On a monthly basis, inflation rose 0.5%, while core inflation came in at 2.9% annually and 0.2% monthly.
The figures matched forecasts, calming markets that had feared a stronger reading could trigger tighter monetary policy. A softer core reading in particular helped reduce concerns about further rate pressure.
Energy and gasoline prices were the main drivers behind the headline increase, supported by higher oil prices tied to renewed tensions in the Middle East. Despite inflation typically weighing on risk assets, Bitcoin moved higher following the release.
Technical setup keeps pressure intact
Bitcoin’s rebound coincided with a recovery from the $60,000 to $62,000 range, an area that includes the 200-week exponential moving average and has acted as support in recent weeks.
However, upside momentum remains limited. The price continues to trade below key short-term resistance levels defined by the 20-period and 50-period simple moving averages on the four-hour chart. The structure also resembles a bear flag, indicating a temporary consolidation within a broader downtrend.
If this pattern resolves lower, Bitcoin could fall toward $57,800, implying a decline of around 7.6% from current levels. Such a move would reflect the scale of the prior selloff.
On the other hand, a breakout above resistance could invalidate the bearish setup. In that case, Bitcoin may climb toward the $64,000 to $68,000 range, aligned with Fibonacci retracement levels.
Broader market signals remain cautious
Sentiment remains fragile despite the short-term rebound. The Crypto Fear & Greed Index has recently hovered in “extreme fear” territory, signaling ongoing caution among traders.
Flows in U.S. spot ETFs are also under scrutiny after a stretch of 13 consecutive days of outflows totaling roughly $3.4 billion in early June, before briefly stabilizing.
Attention is now turning to the Federal Reserve’s upcoming meeting, where policymakers are widely expected to hold rates steady. Current futures pricing suggests a 96.3% probability of no change, though expectations for potential rate hikes later this year have increased.
Key levels to watch
Bitcoin’s near-term direction may hinge on how it behaves around critical levels.
- Support sits between $60,000 and $61,500, with a break below potentially reinforcing the broader downtrend
- Resistance near $64,800 remains a key hurdle, with a decisive move higher needed to shift momentum
A sustained hold above support could allow for further recovery, while a breakdown may extend losses in the weeks ahead.
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