How Will Bitcoin Respond to CPI Data: What Are The Implications of Inflation News For FOMC BTC Strategy?

Bitcoin is feeling the impact of inflation announcement, with the BTC price hovering just under $110,000 at $109,480 after temporarily breaking through that threshold earlier this week. Cryptocurrency traders are now eyeing the Consumer Price Index release on June 11, which could either ignite activity or dampen spirits, depending on the results.

In addition, the Producer Price Index could similarly shock the market; the PMI services and manufacturing prices report is also alarmingly poor.

It is likely that the Federal Reserve will refrain from reducing rates. As long as trade tensions persist with tariffs in place and no agreements reached, these factors are rendered moot. The first rate cut may occur in September, if it happens 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 in Greed Zone

Despite the absence of expectations for rate reductions, trading market sentiment is buzzing, with traders looking forward to another rally towards database highs. However, Bitcoin’s entry into the so-called “Greed” zone is causing concern among some analysts. Historically, this sentiment level often indicates a market close to its peak, usually followed by a pullback.

“Bitcoin’s momentum appears robust, yet the Greed zone necessitates caution. Excessive optimism may foreshadow a correction,” remarked one crypto market expert.

Analysts from 99Bitcoin estimate a 0.2% monthly rise, which could elevate the yearly rate to 2.5% from April’s 2.3%. A stronger inflation reading could halt Bitcoin’s rally, potentially pulling it toward the $108,000 support level as cautious investors reconsider their risk appetites.

On the flip side, if inflation comes in below expectations, it could provide a boost to Bitcoin’s upward trajectory. A year-over-year rate of 2.1%, for example, might serve as a catalyst to change downtrend outlooks and pave the way past $110,000, perhaps moving towards breaking previous highs around $112,500.

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Institutional Purchases Boost Confidence

Strategy, previously known as MicroStrategy, invested over $110 million to acquire 1,045 Bitcoin, signaling strong institutional confidence.

Meanwhile, the wider market is cautiously monitoring geopolitical risks. US-China trade disputes have come to the forefront as Treasury Secretary Scot Bessent engages with China’s Vice Premier regarding semiconductor export regulations. The outcomes of this crucial negotiation could have far-reaching effects on global markets.

What’s Next for Bitcoin Following Inflation Announcement?

Where do we stand? Currently, BTC is at a pivotal point. With technical indicators pointed towards buyers but external pressures heavily influencing the scene, the following scenarios could emerge depending on the CPI report’s findings:

• CPI Negative Surprise: Higher inflation than anticipated could lead to a drop to $108,000 or below, exacerbating downtrend sentiment.
• CPI Positive Surprise: Weaker inflation could rejuvenate bullish momentum, driving BTC above $110,000 and targeting $111,980.

At this moment, BTC traders and investors are anxiously awaiting the pivotal CPI statistics. With institutional purchases providing price floor and Bitcoin’s role as a hedge against inflation gaining recognition, this week could set up significant movements in the crypto asset landscape.

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