Bitcoin moved modestly higher on Thursday as softer U.S. producer inflation data supported risk sentiment across financial markets. Bitcoin (BTC) traded near $63,900, recovering slightly from its weekly lows while U.S. stocks also advanced.
Despite the improvement, Bitcoin remained trapped in a relatively narrow trading range as investors assessed the latest inflation figures, Federal Reserve policy expectations and key BTC support levels.
Bitcoin Recovers Toward $64,000
Bitcoin gained around 0.5% on the day, trading close to $63,900, according to TradingView data.
Price volatility remained limited, with BTC struggling to establish a clear short-term direction.
The move came after Bitcoin had approached its weekly lows, while softer U.S. inflation data provided some support for risk assets.
U.S. PPI Shows Further Inflation Cooling
The latest U.S. Producer Price Index (PPI) provided another encouraging inflation signal.
Headline PPI was unchanged month-on-month in July, compared with expectations for a 0.2% increase. On an annual basis, producer prices increased 4.7%, below the expected 4.9%.
According to the Bureau of Labor Statistics, higher prices for final demand services and construction were offset by declining prices for final demand goods.
Lower gasoline and broader energy prices were among the biggest contributors to easing producer inflation pressures.
The report followed July’s Consumer Price Index figures, which also strengthened expectations that U.S. inflation is gradually cooling.
S&P 500 and Nasdaq Rise After PPI Data
U.S. equities responded positively after the PPI release reduced expectations for another aggressive move from the Federal Reserve.
At the time referenced in the report, the S&P 500 was up approximately 0.87%, while the technology-heavy Nasdaq Composite gained around 0.94%.
Bitcoin’s modest rise alongside equities showed that improved risk sentiment was also providing some support to the cryptocurrency market.
Fed Rate Pause Expectations Strengthen
Expectations that the Federal Reserve will leave interest rates unchanged at its September meeting increased following the latest inflation data.
CME FedWatch figures cited in the report showed markets assigning a 65.6% probability that rates would remain within the current 3.50%-3.75% range.
The previous day’s CPI report had already increased expectations for a Fed pause, while the softer PPI figures added further support to that view.
Lower expectations for future interest rate increases can benefit assets such as Bitcoin and equities by improving overall market liquidity and risk appetite.
Cleveland Fed President Remains Cautious
Despite improving inflation figures, some Federal Reserve officials remain concerned that price growth is still too high.
Cleveland Federal Reserve Bank President Beth Hammack questioned whether the current pace of disinflation would be sufficient to return inflation to the Fed’s 2% objective within an acceptable timeframe.
Her comments highlighted the continued disagreement among policymakers over the appropriate path for interest rates.
Hammack was among three officials who supported a 0.25 percentage-point rate increase in July, reflecting the more hawkish side of the Federal Reserve’s policy debate.
Bitcoin Traders Watch $61,000 Support
While macroeconomic conditions provided some support for BTC, traders continued to focus on important technical levels.
Glassnode co-founder Rafael Schultze-Kraft highlighted $61,000 as a potentially significant Bitcoin level because of the concentration of leveraged long positions around that area.
A decline toward $61,000 could trigger a wave of long liquidations. Forced selling from leveraged traders could then intensify downward momentum if support fails.
This makes the area particularly important for traders monitoring short-term Bitcoin price action.
$63,000 Also Remains a Key Bitcoin Level
The $63,000 area has also become an important short-term level for BTC after repeated tests.
Frequent retests of support can weaken a price floor over time, increasing the possibility of a breakdown if buyers fail to defend the level.
At the same time, Bitcoin’s ability to remain close to $64,000 despite recent selling pressure suggests that traders have yet to establish clear control over the market.
Bitcoin Awaits Its Next Major Move
Bitcoin’s reaction to the softer U.S. PPI report has so far remained relatively restrained compared with gains in U.S. equities.
Cooling inflation and stronger expectations for a Federal Reserve pause could provide a more supportive macroeconomic environment for risk assets. However, uncertainty surrounding monetary policy and leveraged positioning continues to limit Bitcoin’s momentum.
For now, $63,000 and $61,000 remain important downside levels, while traders will be watching for a stronger move above the current range to signal renewed bullish momentum.
With Bitcoin hovering near $64,000, the cryptocurrency market remains finely balanced as investors wait for the next catalyst to determine its direction.
