- Bitcoin price reached $58,000 as markets reacted positively to the higher-than-expected U.S. Producer Price Index (PPI) inflation data for June.
- The U.S. Dollar Index (DXY) fell after the PPI release, while Bitcoin and U.S. stocks saw modest gains.
- Analysts are calling for a daily close above $58,350 for Bitcoin to break the lower high resistance and position itself for a potential rally towards $60,600.
The latest Producer Price Index (PPI) data showed higher than expected inflation in the US for June. This initially led to gains in the dollar and bond yields, before falling back down as the day continued. In this article, we’ll analyze how Bitcoin and the broader markets reacted to the sticky inflation numbers.
Bitcoin’s Positive Reaction
Bitcoin edged higher in line with US stocks as the PPI print came out higher than forecast. The cryptocurrency hit around $58,000 around the Wall Street open. Year-on-year PPI increased 11% in June, higher than the 10.7% expectation. This shows that inflation pressures remain persistent in the economy.
US Dollar Declines
After initial gains following the PPI release, the US dollar reversed course and moved lower on the day. The US Dollar Index (DXY) was down 0.35% at the time of writing, falling to its lowest level in over a month. While the PPI numbers were higher than expected, the negative market reaction signals concerns over weakening economic demand ahead.
Bitcoin Order Book Analysis
According to Skew, the Bitcoin spot order book on Binance looked fairly healthy after the data release. While orders are skewed to the bid side, Skew noted that market flows need to translate this into actual bids to support further gains. The order book chart highlighted key liquidity areas on the exchange.
Analysts Want Stronger Follow Through
Some analysts said Bitcoin needs to show more bullish strength following the PPI reaction. Popular trader Rekt Capital noted that BTC needs to close the daily candle above $58,350 to break a key downward trendline. This would help position the cryptocurrency for further gains. Continued closes above key resistance levels are needed to confirm a longer-term trend change.
Conclusion
Overall, the PPI inflation data came in stickier than expected, though still below the previous month. Bitcoin and stocks showed initial gains on what was likely short covering. But the dollar’s decline showed concerns over weakening growth. Follow-through is now needed to confirm that Bitcoin can build on its bounce. Sustained strength above key technical levels would offer more evidence of a bullish shift in market structure.
