Bitcoin Steady Above $119K Amid Cooling Inflation
Bitcoin is demonstrating resilience, holding above $119,000 as cooling U.S. inflation data and a $2 billion stablecoin injection fuel market optimism. Analysts foresee a potential breakout towards $120,000 and beyond.
Inflation Data Provides Relief
The latest U.S. Producer Price Index (PPI) revealed cooler-than-expected inflation in June, boosting Bitcoin. While the Consumer Price Index (CPI) showed a slight increase the day before, the PPI numbers offered reassurance. The index rose 2.3% year-on-year, below the projected 2.5%, delivering a positive signal to investors.
Crypto analyst Matthew Hyland noted that the CPI uptick was primarily due to a temporary surge in oil prices, which have since declined. He stated that fears of sustained high inflation might be exaggerated.
The world is slipping back towards #deflation. Even the US reported zero #PPI. Potentially good for risk assets #BTC etc as money printing returns BUT long term, just digging a DEEPER HOLE for the financial system which is unsustainable. They love kicking the can down the road 🥹 pic.twitter.com/c0JD9EWajt
— Matthew Dixon – Veteran Financial Trader (@mdtrade) July 18, 2025
Despite cooling inflation, the market isn't anticipating a Federal Reserve rate cut at the July 30 meeting, according to the CME Group’s FedWatch Tool. Historically, lower inflation has supported risk assets like Bitcoin.
Liquidity Builds Near $120K
Bitcoin's price is consolidating between $116,000 and $120,000, forming a tight range that often precedes significant moves. Currently, BTC is trading above $118,000, up 2.4% in the last 24 hours.
Analysts are closely monitoring a liquidity zone between $119,500 and $120,500. These levels are dense with ask orders, potentially driving prices higher if momentum increases. Coinglass liquidation heatmap indicates these clusters are key areas for traders and automated systems.
Another technical aspect is the CME futures gap between $114,300 and $115,600. Bitcoin often revisits these gaps, but it's currently holding above this level, suggesting short-term strength.
#BTC
Looks like Bitcoin is finding support just above its Daily CME Gap$BTC #Crypto #Bitcoin https://t.co/QcNm4fopm7 pic.twitter.com/FWyxwX0lir
— Rekt Capital (@rektcapital) July 16, 2025
$2 Billion Stablecoin Inflow and Institutional Demand
A significant development is the influx of over $2 billion in stablecoins, particularly Tether (USDT), into major derivatives exchanges. This inflow often precedes large long positions, indicating high market confidence.
CryptoQuant analyst Amr Taha views this as a sign that institutional players are preparing for a breakout. The minting of new USDT tokens suggests fresh demand from major investors.
Historically, such large stablecoin deposits precede price rallies. Traders use stablecoins to open futures and perpetual positions, increasing market leverage and driving price movements.
This liquidity inflow, combined with Bitcoin's consolidation near a resistance level, sets the stage for a potential upside surge.