Ahead of the U.S. inflation report for July, bitcoin traded above $65,000, reflecting a recovery trend driven by tepid U.S. employment figures and increased interest from institutional buyers. Trading at approximately $64,955, it saw a 0.66% uptick in the past 24 hours and a 4.36% increase over the last week, even peaking at $65,245 during the session.
The upcoming significant macro event will be the scheduled release of July’s consumer price index (CPI) from the Bureau of Labor Statistics, set for Wednesday, August 12, at 8:30 a.m. ET. This follows a surprising decline in U.S. job numbers, which has tempered expectations for further Federal Reserve tightening.
In July, the economy recorded a loss of 23,000 nonfarm payroll positions, with the unemployment rate remaining close to 4.1%. The job figures for May and June were adjusted downward by a total of 103,000 jobs.
Following the employment report, bitcoin initially jumped nearly 2%, as many believed the weak hiring data would alleviate pressure on the Fed; however, it struggled to maintain support above the $65,000 mark. Statements from Fed officials on July 29, after holding the target range steady at 3.50%-3.75%, were also ambiguous, although three voting members of the Federal Open Market Committee advocated for a 25bp increase.
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Alongside the price recovery, institutional interest surged: The platform SoSoValue recorded approximately $854 million in net inflows into U.S. spot Bitcoin ETFs from August 3 to August 7, with $694 million directed into BlackRock IBIT alone. Data from Farside for the same period indicated inflows of $865.3 million, showcasing a consistent trend in both datasets during this crucial week.
Bitcoin once again encountered resistance in the range of $65,000 to $66,000. The RSI was noted at 55.07, surpassing its moving average of 50.44 and the neutral level of 50, suggesting positive momentum without being overbought. The Awesome Oscillator also indicated bullish sentiment at 664.19, though it showed small histogram bars, indicating that momentum hadn’t confirmed a breakout yet.
Analyst Michaël van de Poppe pointed out a price level of $65,800, suggesting if this threshold is maintained, it could lead to a further rise towards $73,700. He confirmed bullish divergence for both the RSI and MACD on longer timeframes, establishing a technical target.
Regarding inflation data: The overall Consumer Price Index (CPI) dropped by 0.4% in June and rose 3.5% year-on-year. Core inflation, which excludes energy and food prices, remained steady month-on-month and increased 2.6% over the past year. Economists surveyed by Reuters predict that the headline inflation for July will decrease to 3.4%, and core CPI will be at 2.5%.
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A strong inflation reading might heighten expectations for Fed hawkishness and put pressure on risk assets. Conversely, a lower inflation figure could validate the market’s reaction to the disappointing jobs report. Bitcoin is expected to find support around $65,000 and potentially trade beyond $65,800 as traders assess the macroeconomic environment for further upward movement.
The pivotal question remains whether BTC▲$77,666.00 can sustain its rebound and break through key resistance levels or if it will revert towards the lower end of its recent trading range.