Why did Bitcoin rebound to $69,000?

The crypto market has just experienced a spectacular surge this Wednesday and the price of Bitcoin has once again exceeded the symbolic mark of $69,000. This meteoric rise follows the publication of weaker-than-expected US inflation data.

The immediate market reaction

After its recent fall, Bitcoin has re-crossed the symbolic mark of $69,000, marking a significant increase following the publication of the latest inflation data in the United States. The Consumer Price Index (CPI) report showed an annual increase of 3.3% in May, slightly lower than economists' forecasts of 3.4%. This lower-than-expected figure was viewed positively by investors, fueling a wave of buying in the cryptocurrency market. As a result, Bitcoin saw an increase of over 3% in 24 hours, reaching a high of $69,300.

This surge resulted in massive liquidations of short positions, totaling $28 million, and $48 million in Bitcoin positions liquidated in total, according to Coinglass data.

The influence of institutional investors and monetary policies on Bitcoin

As institutional investors show growing interest, market data reveals a downward trend in Bitcoin balances on exchanges, with more than 14,000 Bitcoin withdrawn over the past two days. This accumulation by market “whales” reinforces bullish sentiment, despite the massive outflows seen in spot Bitcoin ETFs in the United States. This strategic move by large investors suggests confidence in the resilience of Bitcoin in the face of current economic fluctuations.

At the same time, expectations of rate reductions by the American Federal Reserve add an additional dimension to this dynamic. Monetary decisions by other major economies, such as the European Central Bank and the Bank of Canada, which have already started to reduce their key rates, are weakening the US dollar and creating a favorable environment for Bitcoin. The prospects of monetary easing on a global scale could support a new phase of increase, potentially beyond the $80,000 mark.