Bitcoin (BTC) reclaimed the $65,000 mark, rising 1.78% in the last 24 hours and 4.38% over the past seven days, as softer US inflation data lifted sentiment across risk assets. According to the US Bureau of Labor Statistics, inflation fell 0.4% in June to a seasonally adjusted annual rate of 3.5%, driven by rapidly declining energy costs. This marks the largest one-month shift in prices since April 2020, following a 0.5% increase in May. The overall May inflation rate was 4.2%, indicating a notable cooling in June.
Slower inflation typically benefits Bitcoin and other risk assets, as it may reduce pressure on the US Federal Reserve to hike interest rates. However, investors remain focused on the “higher for longer” interest rate outlook. High borrowing costs can restrict capital flow in the financial system, potentially dampening demand for speculative assets like cryptocurrencies.
Traders on Polymarket assign a 94% probability that the Fed will keep rates unchanged at its July meeting, curbing fears of an imminent policy shock but signaling that markets are not convinced of a near-term easing cycle.
Oil prices also eased inflation concerns, with Brent crude falling 0.80% to $88.51 per barrel and US West Texas Intermediate (WTI) declining 0.46% to $82.10 per barrel, amid diplomatic efforts in the Middle East.
ETF Inflows Show Cautious Demand
According to SoSoValue, US spot Bitcoin ETFs recorded $226.92 million in net inflows on July 20, marking a fifth consecutive session of inflows. BlackRock’s IBIT led with $116.48 million, followed by Ark Invest’s ARKB at $72.74 million, and Grayscale Bitcoin Mini Trust (BTC) at $41.45 million. Other funds, including Fidelity’s FBTC, Bitwise’s BITB, Morgan Stanley’s MSBT, and VanEck’s HODL, also saw inflows, while Grayscale’s GBTC experienced $45.4 million in net outflows.
CoinMarketCap’s Crypto Fear and Greed Index stands at 37, still in “fear” territory, but significantly improved from the month’s start when it was at 18 in “extreme fear.”
Technical Structure
BTC edged above $65,000 on Tuesday, following a breakout above the 50-day Exponential Moving Average (EMA) at $65,051. Despite this move, BTC remains well below the 200-day EMA at $74,693, which continues to cap the broader trend. Momentum is positive, with the Relative Strength Index (RSI) near 57 and the Moving Average Convergence Divergence (MACD) above the zero line, indicating buyers retain an advantage but face a higher-timeframe barrier.
On the upside, immediate resistance is at $70,000, with a subsequent hurdle near the 200-day EMA at $74,693. On the downside, support is seen at the 50-day EMA at $65,051, and a deeper pullback would expose the horizontal floor at $60,000.
Frequently Asked Questions
1. Why did Bitcoin reclaim the $65,000 level?
Bitcoin moved above $65,000 after softer US inflation data improved sentiment across risk assets. BTC also gained support from positive ETF inflows and a breakout above the 50-day EMA.
2. How much inflow did US spot Bitcoin ETFs record?
According to SoSoValue, US spot Bitcoin ETFs recorded $226.92 million in net inflows on July 20. BlackRock’s IBIT led with $116.48 million, followed by ARKB with $72.74 million.
3. Why is the Fed outlook still limiting Bitcoin gains?
Markets still expect interest rates to remain elevated for longer, which can reduce liquidity for risky assets. Polymarket traders assign a 94% chance that the Fed will keep rates unchanged in July.
4. What does the Crypto Fear and Greed Index show?
CoinMarketCap’s Crypto Fear and Greed Index stands at 37, still in the “fear” zone. However, sentiment has improved from the month’s start, when the index was at 18 in “extreme fear.”
5. What are the key Bitcoin support and resistance levels?
Bitcoin faces immediate resistance near $70,000, followed by the 200-day EMA at $74,693. On the downside, support sits near the 50-day EMA at $65,051, with deeper support around $60,000.
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