Bitcoin Price Analysis: Can US CPI and Grayscale Investments Spark $65k Rally?

Bitcoin’s price broke above $61,700 on August 14, after climbing 7% in the last two days. On-chain data reveals increased whale demand from Grayscale’s investments trust coinciding the dovish US CPI data. Could BTC be on the verge of a $65,000 breakout?

BTC Surges 7% in 48-Hours

Bitcoin began August with a shaky start, but over the past week, the cryptocurrency has gained steady upward momentum. The most recent wave of Bitcoin’s rally can be linked to Grayscale, a major institutional investor, which announced new crypto asset offerings to its U.S.-based clientele.

The uptrend started when Grayscale launched new cryptocurrency trusts for SUI, TAO, and MKR. This event, occurring on August 12, was perceived by investors as a deepening of institutional adoption in the crypto space. The bullish sentiment from Grayscale’s move has since extended to Bitcoin, driving up its price.

Bitcoin Price Action BTCUSD | TradingView

As the chart above indicates, Bitcoin’s price has risen 7% in the last two days. On August 12, BTC was trading around $58,000, and by August 14, it had surged to $61,700. This price increase underscores the positive impact of Grayscale’s actions on the market.

Now, Bitcoin seems poised for further gains, driven by an imminent shift in the U.S. macroeconomic landscape.

Dovish CPI Could Drive BTC Further Upwards

Building on the momentum from Grayscale’s recent activity, Bitcoin’s price is also being buoyed by favorable macroeconomic conditions. On August 14, the U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) data for July, which provided additional bullish sentiment for Bitcoin.

As shown in the chart above, the U.S. CPI rose by 2.9% year-over-year, slightly below the estimated 3.0%. Meanwhile, the core CPI, which excludes food and energy prices, increased by 3.2% year-over-year, matching the forecast. These figures suggest that inflation is slowing, reinforcing a dovish outlook on monetary policy.

US CPI Chart Aug 2024 | TradingEconomics

A dovish CPI report can be interpreted as a signal that the Federal Reserve may halt its interest rate hikes or even consider a rate cut in the near future. Many market participants now expect an interest rate cut as early as September. Lower interest rates generally lead to a weaker U.S. dollar and higher demand for alternative assets like Bitcoin.

The combination of Grayscale’s institutional actions and the dovish CPI report presents a compelling case for a bullish Bitcoin price trajectory in the near term.

BTC Price Forecast: All Eyes on $65k Target

As Bitcoin continues its upward trajectory, strategic traders are closely watching the $65,000 target. The technical indicators in the chart below suggest that BTC is leaning bullish, with key resistance and support levels now in focus.

First, the Keltner Channels (KC) indicator highlights critical resistance at $65,000, with support solidified around $58,000.

Bitcoin Price Forecast BTCUSD | TradingView

If Bitcoin’s price breaks above the upper KC band at $65,000, it could trigger a robust bullish momentum, potentially driving the price even higher. On the downside, a breach of the lower KC band at $58,000 could signal a prolonged retracement, but this appears unlikely given the current market dynamics.

Bitcoin price outlook remains positive, supported by both institutional demand and favorable macroeconomic conditions.

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