Bitcoin Bulls Halt $4K Dip as US Dollar Hits New 3-Year Lows

Bitcoin bounced back from the $107,000 mark amid slowing US inflation data that weakened the dollar. As market analysts predict possible new all-time highs before the end of June, expectations around Federal Reserve interest rate cuts are creating a bullish sentiment within the crypto community.

Bitcoin has shown resilience, managing to bounce back near the anticipated low of $107,000 as of June 12. This movement coincides with US inflation data that has benefited the bulls while weakening the US dollar. It’s interesting to see how BTC is navigating through market challenges, especially with new all-time highs possibly in sight before the month wraps up.

Recent data from Cointelegraph Markets Pro and TradingView revealed BTC/USD gained some strength after hitting $106,600 on Bitstamp, defying an overall downward trend. The uptick began following the release of the Producer Price Index (PPI), which surprisingly came in lower than expected. This figure marks the slowest increase seen since September 2024, adding to the momentum from the Consumer Price Index (CPI) results the previous day.

As earlier reported, easing inflation offers the Federal Reserve the potential to lower interest rates more quickly—a move that could enhance liquidity flows into cryptocurrency markets as well as other risk assets. Still, the Fed has maintained a hawkish stance regarding its policies for 2025, even facing pushback from US President Donald Trump. Looking ahead, the CME Group’s FedWatch Tool indicates markets are now anticipating a rate cut by the Fed in its September meeting, while the June 18 meeting is expected to maintain the status quo.

The recent inflation data has had a noticeable impact on the strength of the US dollar, resulting in the dollar index (DXY) dropping to its lowest point since March 2022. In this context, trading firm QCP Capital emphasized ongoing concerns related to the US-China trade situation but noted that the overall climate seems favorable for crypto bulls. They pointed out in a bulletin to their Telegram subscribers, “Despite a modest pullback, macro conditions remain constructive for further institutional engagement and capital deployment into digital assets.”

Bitcoin traders currently find themselves in a bit of a tricky territory, with the BTC price briefly dipping nearly $4,000 within 24 hours. Popular trader Daan Crypto Trades weighed in, saying, “At this point I’m fairly certain that if price breaks either the current monthly high or low, that it will keep trending that direction for the rest of June (and possibly beyond).”

Just a bit earlier, market players had anticipated this dip to $107,000, something that trader James Wynn had forecast as the bounce zone for the day. Fellow trader Killa echoed this sentiment, stating, “As of now, structure is still bullish. Bitcoin rejected local supply & is now pushing into demand around 106-107K.” He expressed confidence in a subsequent rise to new all-time highs, potentially reaching as high as $116,000 before June wraps up.

It’s essential to note that this article does not offer any investment advice or recommendations. Trading and investing can be risky, so it’s highly advised that readers carry out their own thorough research before making decisions.

In summary, Bitcoin shows signs of strength despite recent volatility, with potential highs of up to $116,000 looming on the horizon. Easing inflation may provide the Federal Reserve with the leeway to cut rates, subsequently benefiting the crypto market. However, traders remain cautious, watching key price levels closely after recent declines. Nonetheless, the overall sentiment in the market seems to remain bullish, indicating a growing institutional interest in digital assets moving forward.

Original Source: cointelegraph.com