How Will Bitcoin React to CPI Data: What Does Inflation News Mean For FOMC Bitcoin Play?

Inflation news is affecting Bitcoin, with the BTC price pacing just below $110,000, trading at $109,480 after briefly punching through that resistance earlier in the week. Crypto traders are now looking to June 11’s Consumer Price Index release, a potential spark or a wet blanket, depending on how the numbers land.

Meanwhile, the Producer Price Index very likely could tank the market as well; the PMI services and manufacturing prices report is also abhorrently bad.

Most likely the Fed will wait on cutting rates. As long as there is the tariffbullshit, no deals, the deadline not over, it’s all irrelevant.  The first cut will be in September, if at all.

Trend is your friend

US ISM manufacturing pic.twitter.com/t29FymALKy

— Alessio (@AlessioTMAD) June 4, 2025

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Inflation News: Bitcoin Sentiment Reaches Greed Zone

Even with no hope for rate cuts, market sentiment is soaring, with traders anticipating another potential rally to all-time highs. However, Bitcoin’s entry into the so-called “Greed” zone is ringing alarm bells for some analysts. Historically, this sentiment level has signaled a market nearing its peak, often followed by a retracement.

“Bitcoin’s momentum is strong, but the Greed zone warrants caution. Over-optimism could precede a correction,” noted one market analyst.

Bitcoin

Price

Market Cap

BTC

$2.18T

24h7d30d1yAll time

99Bitcoin’s analysts peg a 0.2% monthly increase, which would tick the yearly rate up to 2.5% from April’s 2.3%. A hotter inflation readout could snap Bitcoin’s rally, potentially dragging it toward the $108,000 support zone as wary investors reassess their risk tolerance.

Conversely, inflation coming in softer than forecast could deliver a lifeline to Bitcoin’s upwards momentum. A year-over-year rate of 2.1%, for instance, might be the catalyst to flip bearish narratives and clear a path past $110,000, potentially en route to smashing through previous highs around $112,500.

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Institutional Buying Fuels Optimism

Strategy, formerly known as MicroStrategy, dropped over $110 million to scoop up 1,045 BTC, sending a clear message about where institutional confidence lies.

Meanwhile, the broader market is keeping a cautious eye on geopolitical uncertainties. U.S.-China trade tensions have crept into focus as Treasury Secretary Scot Bessent meets with China’s Vice Premier over semiconductor export rules. The outcomes from this high-stakes chess match could ripple well beyond the two nations, with potential shocks to global markets.

Where Does Bitcoin Go From Here After Inflation News?

Where are we? At its current levels, Bitcoin finds itself at a crossroads. With technical indicators favoring buyers but external factors weighing heavily, the following scenarios could unfold based on the CPI report’s outcome:

• Negative CPI Surprise: Higher-than-expected inflation could trigger a drop to $108,000 or lower, intensifying bearish sentiment.
• Positive CPI Surprise: Softer inflation could reignite bullish momentum, pushing Bitcoin past $110,000 and potentially targeting $111,980.

For now, Bitcoin traders and investors are holding their breath, waiting for the critical CPI data. With institutional buying lending support and Bitcoin’s status as an inflation hedge gaining traction, this week could set the stage for the next big move in the cryptocurrency market.

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