June CPI and PPI both cool, Clarity Act gains momentum, but Iran tensions cap the rally
Bitcoin has climbed back above $65,000, lifted by softer-than-expected US inflation data. June’s Consumer Price Index (CPI) came in below forecasts, and the Producer Price Index (PPI) posted a surprise decline as well, sharply easing worries about another Federal Reserve rate hike. Gains remain capped, however, as the US-Iran conflict enters its fifth day.
CPI and PPI Cool Together — Rate Hike Odds Drop From 42% to 17%
The US Labor Department reported June CPI rose 3.5% year-over-year, down from May’s 4.2% and below the market consensus of 3.8%. On a monthly basis, prices fell 0.4%, far exceeding the expected 0.2% decline and marking the steepest monthly drop since April 2020, at the height of the pandemic. June’s Producer Price Index added to the picture, falling 0.3% month-over-month against expectations of a flat reading. With both gauges pointing the same way, the odds of a July rate hike priced into CME FedWatch futures tumbled from 42% the day before the CPI release to just 17% on release day.
Bitcoin responded by climbing from around $62,097 the day before the CPI print to as high as $65,623 within two days, its highest level since June 22. Ethereum jumped more than 6% over 24 hours, while XRP and Solana each gained roughly 3-4%.
Clarity Act Gains Steam as Trump Meets Senators at the White House
Regulatory optimism added further fuel to the rebound. The Senate is pushing to pass the digital asset market structure bill known as the Clarity Act before the August recess, and President Trump reportedly met with senators at the White House to discuss the bill’s progress. However, after Trump’s recent financial disclosure revealed more than $1 billion in crypto-related earnings, several Democratic senators are pushing to add an ethics provision barring the president and his family from holding business interests in crypto platforms — a sticking point that could complicate final passage.
Iran Risk Still Looms, Limiting the Upside
Despite the favorable inflation backdrop, gains haven’t fully broken out, largely because of the ongoing US-Iran military conflict. Both sides have been locked in a struggle over control of the Strait of Hormuz for five straight days, and Iran has once again fully closed the strait. Policy uncertainty has added to the mix as well: President Trump announced a 20% toll on cargo passing through the strait, only to reverse the decision a day later amid international backlash. Rising oil prices and geopolitical tension continue to weigh on risk appetite across markets.
Investor Takeaways and Expert Views
⚠️ Things Investors Should Watch
- The range-bound market may persist: Bitcoin has traded between roughly $59,000 and $66,000 over the past month. Whether this rebound breaks decisively above that range or simply reverts back into it remains unclear.
- Don’t overreact to a single data point: This is a volatile market where a single CPI or PPI release can move prices 4-6% within a day or two. Chasing a rally on one data point is riskier than waiting to confirm the Fed’s follow-through signals.
- Geopolitical risk remains elevated: With the US-Iran conflict now in its fifth day, sentiment could reverse quickly on any oil price spike or flight to safe-haven assets. Keep a close eye on developments around the Strait of Hormuz.
- Clarity Act passage isn’t guaranteed: Some of the current optimism around regulatory clarity is already priced in. If negotiations over the ethics provision stall amid the conflict-of-interest controversy, that optimism could quickly turn to disappointment and trigger a pullback.
📌 What Experts Are Saying
- Dean Chen, Bitunix analyst: Sentiment has improved since the CPI release, but the path forward will depend on the Fed’s policy signals, inflation trends, and broader risk appetite.
- Forbes: Flagged a break above $67,300 as the next key level to watch.
- Tim Enneking, co-founder of Psalion: Cautioned that a bottom hasn’t been fully confirmed yet, with both highs and lows continuing to trend lower.
- Analytics Insight: Identified the $65,000-$68,000 zone as the next major resistance.
Taken together, this rebound reflects a clear positive catalyst in cooling inflation data, compounded by regulatory optimism. But two key uncertainties remain: geopolitical risk from the US-Iran standoff, and whether the Clarity Act ultimately passes. Rather than chasing the short-term rally, a more prudent approach is to keep watching both the Fed’s policy signals and developments in the Middle East.