Bitcoin’s bullish momentum appears far from over, as cooling inflation data and strong technical indicators provide the perfect storm for an extended rally. With the Consumer Price Index (CPI) and Core CPI both coming in lower than forecasted, markets are breathing a sigh of relief—even though the inflation rate remains above the Federal Reserve’s 2% target.

For May, U.S. inflation rose just 0.1%, with the annual rate settling at 2.4%. Core CPI, which strips out volatile food and energy costs, also ticked up by only 0.1%, compared to a 0.3% expectation. On a year-over-year basis, Core CPI registered at 2.8%, beating the 2.9% forecast. Even apparel prices—anticipated to rise due to recent tariffs—declined, highlighting broader deflationary trends across consumer categories.

This marked the fourth straight month of lower-than-expected inflation prints. While the data eases concerns of a near-term inflation surge, the Federal Reserve remains cautious. With inflation still sitting above target, interest rate cuts remain off the table for now, despite growing pressure from President Trump’s administration. However, markets are interpreting the data as a green light for risk-on sentiment, which has historically benefited Bitcoin.

Bitcoin’s Long-Term Momentum Remains Intact

From a technical standpoint, Bitcoin is showing solid strength on higher timeframes. On the weekly chart, BTC is comfortably trading above both the 20- and 50-week moving averages—an indication that the broader uptrend is firmly in place. The price recently moved past the prior weekly close high of $104,400, reinforcing the bullish structure.

Moreover, key volume indicators support this rally. The On-Balance Volume (OBV) broke above its December 2025 high, showing sustained buying interest and participation even after the March–April retracement. The Chaikin Money Flow (CMF) also pushed above +0.05, a signal of significant capital inflows into BTC markets.

Another critical signal comes from the fair value gap (FVG) between $98,000 and $100,700—a demand zone that was tested earlier in June. The successful defense of this zone reaffirms buyers’ strength and provides a cushion in case of short-term volatility.

Short-Term Signals Remain Bullish, With Caution Ahead

While the long-term trend looks promising, short-term traders should stay alert to potential price dips. On the daily chart, Bitcoin has formed another FVG between $106,500 and $108,300. The asset tapped this level on Thursday but has yet to close below it.

A daily candle close beneath $106,500 would be the first warning signal, potentially opening the door for a retracement toward $100,000–$102,000. Still, unless that key support level is breached, bullish momentum remains in control.

Importantly, profit-taking has subsided over the past few weeks, according to exchange inflow data. This reflects growing conviction among holders who believe the current rally could push Bitcoin significantly higher. With many market participants now targeting $120,000 as the next milestone, more aggressive forecasts—such as $150K or even $200K—are beginning to gain traction.

The Road to $200K?

While predictions above $200,000 remain speculative, they’re not without basis. With favorable macro conditions—including rising global liquidity, declining inflation, and growing institutional adoption—Bitcoin could find itself in an environment primed for explosive upside.

In the coming weeks, market participants will watch for confirmation that BTC can hold above its current demand zones while maintaining strong momentum. If these conditions persist, and no major external shocks derail investor sentiment, the path toward $120K and beyond may be more direct than many anticipate.

For now, Bitcoin appears poised for further gains, with the cooling inflation data serving as a strong tailwind for its next leg up.