Bitcoin Price Slips Below $60,000 After US CPI Data

The Bitcoin price slipped below $60,000 level on Wednesday in wake of US Consumer Price Index (CPI) inflation data that supported the case for the US Federal Reserve to start cutting interest rates next month.

The CPI rose MoM pace of 0.2% and a YoY pace of 2.9% in July, more or less in line with expectations. Core CPI rose at 3.2% YoY, also as expected.

Analysts broadly agreed that the data gives the Fed the “green light” to begin cutting interest rates next month.

Whilst interest US rates have remained at multi-decade highs, inflation has subsided substantially over the past two years.

That has resulted in financial conditions tightening further as the real interest rate (Fed rate minus inflation) rises, despite the US economy showing signs of slowing.

Most notably, US jobs data released earlier this month triggered a recession signal and caused market havoc at the start of last week.

Against this backdrop, most analysts agree that is makes sense for the Fed to begin cutting interest rates.

And this is likely to create a positive environment for risk assets like Bitcoin.

For now, the Bitcoin price remains stuck below key resistance levels in the form of the 21, 50 and 200DMAs.

The rejection of these resistance levels in the $62,000 could explain why sellers have been able to force BTC back under $60,000.

But the case is building for a move higher and a retest of July’s highs near $72,000. Here’s why.

Here’s Why the Bitcoin Price Can Recover to $70,000

So long as further data doesn’t point to the US economy tipping into recession, but continues to support the case for Fed rate cuts, a “goldilocks” macro environment for risk assets could materialize.

That could be one factor that helps spur inflows into Bitcoin ETFs, helping lift the Bitcoin price.

But that’s not the only reason why the near-term price action could be bullish.

A recent report from CryptoQuant highlighted data showing that post-halving miner capitulation has come to an end, pointing to a possible price bottom.

The halving of the BTC reward rate earlier this year resulted in the hash price – the average revenue per unit of mining power – falling to a record low recently.

This drop in profitability put pressure on a lot of less efficient miners, forcing them out of the market. And this potentially resulted in higher BTC sell pressure, as they sold down their holdings to survive.

But the Bitcoin network’s hashrate recently rebounded to a new record high. That suggests miner capitulation is over, and sentiment among miners is strong.

That could mean post-halving miner sell pressure is over.

Technicals could also support the case for a move back above $70,000. X user Titan of Crypto noted that Bitcoin’s MACD indicator just crossed back into positive territory.

This has been a good signal of an imminent price rebound in recent months, as Titan of Crypto’s graph shows.

Bitcoin’s 14-day Relative Strength Index (RSI) also recently rebounded from over-sold territory. A recovery from an oversold RSI is associated with a higher risk of a near-term price rebound, as recent months’ price action shows.