Bitcoin ($BTC) begins the new week bullish as the leading cryptocurrency is up by more than 1% in the last 24 hours.
It is trading above $64,000 on Tuesday after successfully defending the $62,300 support level following the release of softer US inflation data last week.
Trading volume increased when Bitcoin approached the support area, suggesting that a cluster of buy orders may be supporting the price around the $62,300 threshold.
However, persistent monetary-policy uncertainty continues to limit the cryptocurrency’s recovery.
Cooling US inflation reduces rate-hike expectations
The probability of the Federal Reserve raising interest rates in September dropped to about 30% last week, well below the roughly 76% recorded a month earlier.
The shift followed data showing that annual US inflation eased to 3.4% in July, down from 3.5% in June.
The softer reading reduced the immediate pressure on policymakers to tighten monetary policy further.
Nevertheless, inflation remains 1.4 percentage points above the Federal Reserve’s 2% target.
Three policymakers also disagreed with the decision to leave rates unchanged at the most recent Federal Open Market Committee meeting.
The central bank may therefore delay another increase without abandoning its hawkish position.
This prospect continues to weigh on Bitcoin and the wider cryptocurrency market, as higher interest rates generally reduce investors’ appetite for riskier assets.
Bitcoin exchange-traded funds recorded approximately $350 million in net outflows last week. The ETFs also added $137 million in inflows on Monday, indicating that some institutional investors remain cautious about the asset’s near-term prospects.
However, the wider monthly picture appears more encouraging.
Data from SoSoValue suggests that Bitcoin ETFs are on course to attract around $870 million in net inflows during August—the strongest monthly result since April.
If sustained, that figure would represent an increase of about 405% from the previous month and could point to improving institutional sentiment toward Bitcoin.
Monthly ETF flows can provide important insight into investor demand. Continued inflows could help absorb selling pressure and support Bitcoin if broader market conditions improve.
Whales have also continued buying Bitcoin during the ongoing consolidation.
Santiment data shows that wallets holding between one and 100,000 $BTC collectively added a net 10,000 $BTC during the month.
The largest wallets in this group—those controlling between 10,000 and 100,000 $BTC—reportedly accumulated around 30,000 $BTC in 17 days.
Buying by large holders can reduce the amount of Bitcoin available in the market and establish stronger support zones.
This accumulation may partly explain why $BTC has remained above $60,000 over the past 45 days despite unfavorable macroeconomic conditions.
Still, whale purchases do not guarantee an immediate rally. Bitcoin must overcome significant technical resistance before confirming a broader bullish reversal.
Bitcoin price outlook: Can $BTC break above $66,000?
Bitcoin remains in a consolidation phase after its second rejection from the $66,000 resistance level. Consequently, $66,000 is the main upside barrier traders are watching this week.
On the downside, the region around $62,000 has recently provided support. However, this level may represent only a temporary price floor rather than a firmly established technical support zone.
Momentum indicators currently favor a cautious outlook. The Relative Strength Index has moved below its signal line, suggesting that buying strength is weakening.
A decline below 40 could increase the likelihood of Bitcoin retesting the psychologically important $60,000 level.
Conversely, a decisive daily close above $66,000 could strengthen the bullish case and clear the way for a move toward the 200-day Exponential Moving Average near $72,000.
A confirmed breakout from the developing inverse head-and-shoulders pattern could extend the recovery toward $75,000.
Until Bitcoin clears $66,000, however, the cryptocurrency is likely to remain range-bound and vulnerable to changes in interest-rate expectations.
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