Bitcoin is continuing its bizarre price action, especially in the context of the broader macroeconomic outlook.
The US Bureau of Labor Statistics released the Producer Price Index for June, which came out to be hotter than expected. The YoY PPI inflation was 2.6% in June, above the expected 2.3%. Similarly, the core PPI rose by 3%, higher than the market’s consensus 2.5%.
The hot inflation print should have added the selling pressure on BTC. However, the Bitcoin price rallied by nearly 3% since yesterday’s low and is now trading at $58,300.
Unsurprisingly, BRC-20 tokens are rallying due to BTC’s strength. ORDI is up nearly 10% while Stacks has surged by almost 10%. 99BTC – a new BRC-20 token – is also in high demand and has raised close to $2.5 million in its presale.
New Ethereum meme coins such as WienerAI are also poised to break out.
Why Is Bitcoin Price Up Despite Bad Inflation Data?
The Bitcoin Price saw a significant correction yesterday, despite an excellent Consumer Price Index print. In fact, BTC corrected nearly 3% to trade as low as $56,000.
One possible explanation could be that neither the CPI nor the PPI data played any role in Bitcoin’s price trajectory. The continued sell-offs from the German government and entities such as Genesis and Mt. Gox could have led to yesterday’s correction.
However, this theory does not explain why the US stock market also suffered heavy losses post-CPI – with the NASDAQ 100 tumbling down nearly 3%.
Another possibility could be that recessionary fears are in play. A mild CPI print – especially after weaker-than-expected ISM Service PMI earlier this month – increases the risk of recession. This explains why the hot PPI data resulted in a bounce back in equities and Bitcoin.
Finally, it is possible that despite its appearance, today’s PPI data is bullish for stocks and the crypto market. Indeed, the CME FedWatch tool is now showing nearly 88% of at least one rate cut in July.
The Bank of America has explained that while the PPI came out hotter than expected, the items that contribute to PCE inflation cooled down in June. Notably, the Personal Consumption Expenditure or PCE is the Federal Reserve’s preferred inflation metric.
What’s Next For Bitcoin?
As previously mentioned, the Bitcoin price is currently trading above the $58,000 mark. This means that it is within arm’s reach of flipping the 200-day SMA and EMA levels, a decidedly bullish scenario for Bitcoin.
The Bitcoin price is also forming an inverse Head and Shoulder pattern in the daily timeframe, highlighting that a break out to $64k could be next.
BRC-20 Tokens, Ethereum Meme Coins Explode
BRC-20 tokens show a strong correlation to Bitcoin. It is therefore not surprising that ORDI and Stacks are rallying.
As previously mentioned, even new Bitcoin beta tokens – such as 99BTC – are in high demand. 99Bitcoins – a popular crypto education platform with 3 million subscribers – already has strong community backing.
Consequently, 99BTC has quickly raised close to $2.5 million in its presale. Experts believe that the token could deliver outsized returns after its launch, with some even hinting at 10x returns.
New Ethereum meme coins are also in high demand, likely due to the spot Ethereum ETFs going live by next week.
For instance, WienerAI – an AI-powered meme coin – has raised over $7.3 million in its ICO. Smart money traders have been quick to recognize its upside potential, with some projecting up to 100x gains after its launch.
The optimism surrounding WAI is largely due to innovative concepts such as staking rewards and its native AI-enabled Trading Bot.
This new meme coin is expected to go live in the first week of August, considering that its presale is scheduled to end by July 31st.
