Simply put
- Bitcoin is trading for almost $110,000, getting close to its record high of $111,814 set in May.
- Investors anticipate a 0.3% increase in core inflation, with headline inflation expected to be at 2.4% year-on-year.
- Futures prices indicate a possibility of interest rate cuts in September, according to the CME FedWatch tool.
Bitcoin surpassed $110,000 on Tuesday, driven by continued institutional buying and strategic investor placements as they await critical U.S. inflation data that could influence the Federal Reserve’s interest rate decisions for the year.
At one point, Bitcoin reached $110,237 before settling at $109,900. Data from Coingecko shows it has climbed 4.2% over the past week, still hovering just below its peak from May 22.
Investors will be keenly looking at the May Consumer Price Index report due out at 8:30 a.m. on Wednesday.
Economists are forecasting a 0.3% rise in CORE CPI from April and a 0.2% increase in headline CPI from the previous month, expecting year-on-year also to stay at 2.4%, according to MarketWatch. Producer price data is set to be released on Thursday.
While persistent inflation might slow down anticipated rate cuts and impact risk assets, the market sentiment, for now, appears positive.
Fed futures indicate that the market is leaning towards rate cuts in September.
“The current market actions are less speculative and lean more towards structural factors compared to previous cycles,” said Rachael Lucas, a crypto analyst at BTC Markets. “Institutional capital, ETFs, and treasury involvement are crucial in maintaining lasting buying pressure.”
Lucas pointed out a leveraged long position of $54.5 million that has recently generated upward momentum, with support expected around $105,500.
In recent news, MicroStrategy has maintained a hefty 582,000 BTC. Meanwhile, Japan’s Metaplanet is looking to raise $5.4 billion to expand its Bitcoin reserves, and the Blockchain Group has reportedly amassed $342 million, indicating strong demand despite market uncertainties.
In the ETF landscape, BlackRock’s iShares Bitcoin Trust (IBIT) has grown to $70 billion in assets, while an Ethereum ETF has seen significant inflows over the last 15 days.
The macroeconomic signals are also shifting favorably, as the U.S. continues negotiations with the UK regarding trade and is moving forward with CBDC pilot projects involving Crypto ETFs and ChainLink in Hong Kong.
Analysts speculate that the current cycle may be evolving into a “supercycle,” marked by minimal pullbacks and increased resilience from institutional players.
“But that doesn’t mean there are no risks,” Lucas cautioned. “A reversal in regulations, liquidity shortages, or competition could limit investment flows into assets like Ethereum and Solana.”
If profits are realized, the appeal of government bonds might resurface, potentially creating headwinds for crypto prices—especially if the Fed indicates a slower approach to rate reductions, Lucas noted.
Nevertheless, price projections from firms like Bitwise and Vaneck vary from $180,000 to $200,000 by year-end, assuming a continuing flow of investments and stability in the macroeconomic environment.
