Bitcoin recovers after US-CPI driven dip, ENS, BONK, SPX6900 lead altcoin recovery

Bitcoin rebounded from Tuesday’s slump after bulls held the $115,000 support, trimming earlier losses.

The broader crypto market followed suit, with total market capitalisation climbing back above $3.8 trillion and reaching an intraday high of $3.838 trillion. 

However, sentiment turned cautious amid renewed macro uncertainty. The Crypto Fear & Greed Index slipped three points to 70, though it remained in the “Greed” zone.

Altcoin markets regained momentum alongside Bitcoin, as it began retracing its path toward the $120,000 level.

What’s next for Bitcoin?

Bitcoin’s recent dip followed the release of the June U.S. Consumer Price Index (CPI), which showed inflation climbing for the second month in a row.

Headline inflation rose to 2.7% year-over-year, the highest since February, while core inflation increased to 2.9%, just below expectations. 

The monthly rise in CPI was 0.3%, the steepest since January, reinforcing concerns that inflation remains persistent, particularly in key categories such as food and transportation.

The data tempered market expectations of a near-term shift in U.S. Federal Reserve policy. 

Although the lower-than-expected core CPI figure offered some relief, rising headline inflation dampened hopes of a dovish outcome at the upcoming July Federal Open Market Committee (FOMC) meeting. 

As of now, CME FedWatch data shows a 54.3% probability of a rate cut in September, leaving markets in a wait-and-see mode ahead of the U.S. Producer Price Index (PPI) report due later this week.

Compounding the pressure were concerns over potential trade escalation between the US and Russia.

Washington’s threat to impose 100% tariffs unless the Ukraine conflict is resolved within 50 days has added another layer of uncertainty, slowing the pace of the recent crypto rally.

Profit-taking further weighed on prices as Glassnode data shows that investors holding Bitcoin for over five months accounted for 56% of realized profits during the downturn, collectively offloading $1.96 billion.

Miners also joined in. According to on-chain data from CryptoQuant, the Miners’ Position Index (MPI) rose above 2.7, which signals an uptick in Bitcoin transfers from miners to exchanges. 

Historically, such movements often precede short-term corrections, as miners look to lock in gains after strong price rallies.

However, analysts note that this MPI level remains far below extremes seen during past market tops.

Some see the current trend as consistent with a typical bull cycle, where brief consolidations or pullbacks are followed by renewed upward momentum.

Further on-chain analysis by CryptoQuant contributor Onchain School highlighted a spike in profit-taking from long-term holders about 10 days ago. 

While this didn’t prevent Bitcoin from notching new highs, it signals that older coins are being moved, often an indicator of top-cycle selling.

Despite the temporary pressure, Bitcoin’s defense of the $115,000 level has revived bullish sentiment. 

With the June PPI data now released, showing wholesale inflation remained flat, markets are shifting focus to upcoming Fed guidance, as traders watch whether Bitcoin can regain strength and attempt another breakout above $120,000.

Bitcoin still has room to run

Despite hitting new all-time highs earlier this week, analysts say Bitcoin is not yet in overheated territory.

According to CryptoQuant’s Axel Adler Jr., the market has not triggered a “Peak Signal”, a metric that typically appears when Bitcoin reaches major tops. 

The signal, based on normalized price models and coin destruction metrics, remains absent, suggesting the current cycle may still have upside potential. See below.