Softer US inflation supports risk assets

The latest US inflation data were market-friendly. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index fell by 0.4% month on month in June 2026 on a seasonally adjusted basis. The annual inflation rate stood at 3.5%.

This matters for Bitcoin because the asset remains sensitive to interest-rate and liquidity expectations. If inflation continues to ease, expectations of a less restrictive Federal Reserve stance could strengthen. That would generally be supportive for risk assets, including Bitcoin.

The USD 70,000 area is the next test

From a technical perspective, the picture has improved, but it has not yet turned decisively bullish. Bitcoin is back above USD 65,000 and is approaching its next important resistance area. In the short term, the USD 67,000 to USD 70,000 range is key.

A sustained break through this zone would confirm the recovery and could bring momentum traders back into the market. If Bitcoin fails to move above it, the rebound remains vulnerable to renewed weakness. Some technical data providers also suggest that the longer-term trend has not yet fully repaired, with the 200-day moving average still shown well above the current price.

Chart: Bitcoin price with 200-day moving average | Source: Yahoo Finance

Momentum remains the key factor

Momentum exists when an asset shows a positive price trend over time. In Bitcoin, this pattern matters because strong upward phases often attract additional demand. For active portfolio managers, the challenge is to identify such phases early without relying on a single indicator.

Moving averages, on-chain data, ETF flows, market breadth and derivatives positioning can all provide useful signals. A recovery becomes more robust when several of these indicators point in the same direction. At present, the price reaction to the US inflation data is constructive. Confirmation above key technical levels is still missing.

ETF flows improve, options market remains cautious

US spot Bitcoin ETFs have recently shown a more constructive trend. Farside Investors reports net inflows of nearly $1 billion over the past seven days. Zooming out the past few weeks, we saw inflows return after a weaker phase.

At the same time, the options market still argues for caution. Deribit data show a defensive skew, with downside protection remaining more in demand than call options on rising prices. This may partly reflect broader nervousness in equity markets, particularly after recent pressure on semiconductor and AI-related stocks. A wider correction in risk assets could also weigh on Bitcoin.

Chart: Bitcoin ETF net flows and Bitcoin price | Source: Glassnode

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Editorial deadline: 22 July 2026

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