Bitcoin Rebounds Toward $65K as Fed Hike Odds Drop

14.07.2026 · By Bernal Fintech Markets Desk

Bitcoin has rebounded toward the $65,000 level following softer-than-expected U.S. inflation data, which sharply reduced market expectations of a Federal Reserve rate hike at the July policy meeting. The June CPI fell 0.4% month over month, the largest drop since 2020, and annual inflation cooled to 3.5%, below market forecasts. This has led to a surge in risk appetite, with Bitcoin rising to $64,535 and Ethereum gaining over 5%.

Analysts note that the drop in inflation has shifted expectations from a tightening monetary policy to a potential easing cycle, which has benefited risk assets like cryptocurrencies. However, some caution remains, as core inflation remains sticky at 2.6% annually, and rising energy prices could still influence future Fed decisions. The market is now pricing in a higher probability of a rate cut in the coming months, with Polymarket odds of a 2026 Fed rate hike falling to 55%.

Market Context and Implications

The June CPI data marked a significant shift in inflation trends, which has had immediate effects on financial markets. Bitcoin’s rally to $64,000 has been accompanied by a surge in short liquidation, with over $135 million in shorts being closed as traders bet on a continued upward trajectory. Ethereum, Solana, and XRP also saw gains, reflecting broader risk-on sentiment across the crypto market. The drop in inflation has also led to a surge in rate cut expectations, with traders increasingly pricing in the possibility of a Fed easing cycle in the second half of 2024.

What it means for markets

The cooling inflation data has created a more favorable environment for risk assets, with Bitcoin and other cryptocurrencies benefiting from reduced rate hike fears. However, the Fed’s potential September meeting remains a wildcard, as energy price volatility and core inflation could still influence policy decisions. Investors are advised to monitor both inflation trends and central bank communications closely.