BTC Jumps on CPI Slide

Bitcoin bulls are seeing renewed optimism across early European trading on Thursday following a breakout rally yesterday in response to the latest US inflation data. With CPI seen cooling for the first time in six months, the US Dollar has fallen back as traders once again rebuild their near-term Fed easing expectations. Pricing for a September cut has jumped around 15 points on the back of the data, bolstered by weaker-than-forecast retail sales too.

Fed Easing Expectations

The Fed has recently signalled its desire to push ahead with easing, hindered only by elevated inflation. Yesterday’s data is now stoking hopes that inflation has peaked and will start to fall back again. If we see further declines in US inflation in coming months, this should increase the selling pressure on USD, creating room for BTC to move higher.

CME to Launch Bitcoin Trading

Bitcoin is receiving an additional boost into the back end of the week on news that the CME is planning to launch Bitcoin trading in a bid to capitalise on soaring institutional demand. On the back of spot-BTC ETF approval and the massive inflow of previously blocked institutional flow, CME Group is reportedly in talks aimed at working out how to launch spot-BTC trading. This would allow institutional traders direct access to the market and, if allowed by the regulator, should see BTC demand surge once again.

Technical Views

BTC

The rally in BTC off the 60695-level support has seen price break above the 64540 level. Recent price action is now looking like an inverse head and shoulders and with momentum studies bullish, the focus is on a continuation higher here. 69355 and the bear channel highs will be the key area to watch, with a break there opening the way for a fresh test of all-time highs.