Bitcoin advanced from approximately $62,800 to $63,800 following the release of the latest US CPI report, as investors responded favorably to inflation data that supported a less hawkish outlook for monetary policy.

The Consumer Price Index (CPI) fell 0.4% in June, its biggest one-month decline since April 2020, following a 0.5% increase in May, according to the US Bureau of Labor Statistics. Annual inflation also moderated, with the headline CPI rising 3.5% year-over-year compared with 4.2% in May.

The monthly drop was largely fueled by a 5.7% decline in energy prices, which more than offset ongoing increases in food and shelter. Food prices rose 0.2%, including both grocery and restaurant prices.

Core CPI was unchanged for the month, as declines in motor vehicle insurance, communications, apparel, medical care, and used vehicle prices balanced gains in recreation, household furnishings and operations, and personal care.

On a 12-month basis, core inflation slowed to 2.6%, while energy prices remained 15.7% higher than a year ago and food prices rose 3%.