Bitcoin traded near $64,000 on Tuesday as risk assets rallied following cooler-than-expected US Producer Price Index data for July. The world's largest cryptocurrency climbed alongside equities, reflecting renewed appetite for riskier holdings after inflation readings suggested the Federal Reserve may have more room to cut interest rates.
The PPI report released Tuesday morning showed producer-level inflation cooling beyond economist expectations. Core PPI, which excludes volatile food and energy components, rose just 2.4 percent year-over-year, marking the lowest reading since March 2021. This data point matters because it reinforces the consumer price inflation narrative that has dominated Fed policy discussions all summer.
Bitcoin has traded in a narrow band between $60,000 and $67,000 for weeks. The cryptocurrency remains sensitive to Fed rate expectations, though this relationship has loosened compared to 2023-2024 when every basis point in rates moved prices by hundreds of dollars. The $64,000 level represents a consolidation zone where holders and traders have built positions over the past month.
The stock market response drove the day's risk-on sentiment. The S&P 500 and Nasdaq 100 both gained on the PPI print, with investors pricing in a higher probability of Federal Reserve rate cuts beginning in September. Options markets now assign roughly 80 percent odds to a 25-basis-point cut at the September meeting, up from 50 percent odds just days earlier.
Bitcoin's modest gains reflect caution rather than euphoria. Trading volume on major exchanges sits below 30-day averages, suggesting many traders are waiting for clearer directional signals. The cryptocurrency bounced off $62,500 support earlier this week but has struggled to break above the $66,000 resistance that capped prices throughout July.
Spot Bitcoin ETFs in the United States, which launched in January, posted their second straight day of inflows totaling $85 million combined. Institutional investors appear content to hold positions rather than aggressively accumulate at current prices. This contrasts sharply with the buying frenzy that surrounded spot Ethereum ETF debuts in July.
Altcoin markets lag behind Bitcoin's performance. Ethereum traded near $2,400, down roughly 8 percent from July highs. Smaller-cap tokens face headwinds from reduced retail trading activity, typical during summer months. Stablecoin volumes on decentralized exchanges like Uniswap remain elevated, indicating traders are hedging positions rather than deploying fresh capital.
The technical picture suggests Bitcoin needs to clear $66,500 to establish momentum toward $68,000 and $70,000. A breakdown below $62,000 opens the door to retesting $60,000 and potentially $58,000 support built during June's sell-off.
Macro data calendars fill with retail sales figures and jobless claims reports this week. These labor market indicators carry outsized weight for Fed decision-making. Bitcoin traders now focus on employment data as the inflation narrative has shifted from "persistently hot" to "gradually cooling," reducing headline risk from surprise upside prints.