This week could set the tone for the second half, and the CPI release in June is likely to determine the cryptocurrency’s near-term direction.
From a macro perspective, the crypto market is heading into another busy week, with eight major economic events on the calendar that could shape investor sentiment. However, the main focus will be on June inflation data, which will be announced on July 14 and 15.
This comes at a crucial time for the market. After weeks of uncertainty, US President Donald Trump officially canceled the Memorandum of Understanding with Iran, sending oil prices sharply higher and putting new macro pressure on Bitcoin. With inflation back in focus, this week’s CPI data could be the key macro catalyst that determines the direction of crypto markets in the near term.
And the data already reflects this change.
As seen in the chart above, interest rate hike expectations rose rapidly last week. The probability of a rate hike has risen to 34.7% from around 18% just a week ago. This suggests the market is pricing in increasingly sticky inflation and a more hawkish Fed.
Naturally, this puts even more focus on this week’s CPI edition. A warmer-than-expected inflation reading could trigger another risk-off move in markets. This playbook has been observed before.
After inflation rose to a multi-year high of 4.3% in May, Bitcoin ended June down 20% as investors pulled back. Now the question is: Bitcoin (BTC) Another double-digit correction is on the way in July.
Bitcoin attracts Wall Street’s attention as macro uncertainty grows
The timing of the latest Bitcoin accumulation does not appear to be random.
Some of the biggest players on Wall Street continue to pile on as the market enters a new macro week. Morgan Stanley added $13.2 million worth of Bitcoin last week, while US spot Bitcoin ETFs also recorded net inflows of $197 million. Fast forward to now, Michael Saylor posted his signature orange dotted image at: XThis is a signal that the market associates with another Bitcoin purchase.
These moves stand out even more when viewed together with Bitcoin’s technical structure. As the chart shows, BTC failed to hold on to gains from the March-April rally, and the May-June correction erased 35% from its local high. Now, with Bitcoin already up over 7% in July, BTC is once again testing a key technical zone.
Against this backdrop, another strong CPI reading could quickly cause sentiment to turn risk-averse, just as it did during the previous inflation scare.
In this context, Wall Street’s continued accumulation could be the difference between Bitcoin continuing its recovery or slipping into another correction. If institutions continue to “buy the fear,” this could indicate the market is becoming more resilient to the hawkish Fed, potentially giving BTC room to extend its uptrend in the second half.
Final Summary
- CPI is the highlight of this week. A higher inflation reading could trigger another sell-off in Bitcoin.
- Wall Street continues to buy Bitcoin. Strong institutional demand could help BTC survive despite macro pressure.
