Bitcoin rallied sharply overnight, climbing from a 24-hour low of $62,314 to hit $65,100 early on July 15 — its highest level in nearly two weeks — after the U.S. June Consumer Price Index (CPI) came in cooler than expected at 3.5%. The move triggered a massive short squeeze, with nearly 70,000 traders liquidated across the crypto market in 24 hours, totaling $355 million, of which short positions accounted for over 80%.
CPI Data Sparks Relief Rally
The catalyst for the surge was the U.S. Bureau of Labor Statistics' June CPI report released on July 14, which showed the annual inflation rate dropping to 3.5% from May's 4.2%, while the monthly figure fell 0.4%. The data, driven by a sharp decline in energy prices amid a temporary ceasefire in the Middle East, came in well below market expectations. Bitcoin initially broke above $63,500 on the news before extending gains overnight. Ethereum also jumped 5.04% to a two-week high of $1,896, while other major cryptocurrencies like Solana (SOL) and XRP followed suit, rising 2.89% and 3.49% respectively.
Massive Short Squeeze Wipes Out Bears
The violent upside move inflicted heavy losses on bearish traders. According to CoinGlass, 69,762 traders were liquidated across centralized exchanges in the past 24 hours, with total liquidations reaching $355 million. Short positions accounted for $287 million — roughly 81% of the total — while longs saw only $67.21 million in liquidations. The single largest liquidation order occurred on Binance's ETH/USDT pair, worth $6.37 million. The fear-and-greed index, though still in "extreme fear" territory, improved to 25 from 22 the previous day, signaling cautious optimism.
Caution Ahead: Oil Prices and Fed Policy
Despite the relief rally, analysts warn that the inflation reprieve may be temporary. The U.S.-Iran ceasefire collapsed last week, and tensions in the Strait of Hormuz have reignited, pushing oil prices higher. The Federal Reserve is widely expected to hold rates steady at its July 28-29 FOMC meeting, but some market participants now price in a potential rate hike in September. Fed Governor Kevin Warsh has reiterated a "zero tolerance" stance on high inflation, suggesting that easing expectations remain premature. U.S. equities also rose on the CPI data, with the S&P 500 gaining 0.38% and the Nasdaq climbing 0.9%, while spot Bitcoin ETFs saw net inflows of $90.4 million on July 10, led by BlackRock's IBIT, breaking a streak of outflows.