Bitcoin Pauses After CPI Report as Markets Watch for Next Move
Bitcoin saw a sharp rise this week but faces uncertainty after the release of U.S. inflation data for June. The price jumped to $118,400 from around $116,500 on Tuesday following the Consumer Price Index (CPI) report, which showed inflation continuing to climb for the second month in a row.
Inflation Data Raises Doubts Over Rate Cuts
- Headline CPI rose to 2.7% year-over-year, the highest since February and up from 2.4% in May — right in line with expectations.
- Core CPI, which strips out food and energy, increased to 2.9%, slightly below the 3% forecast.
- On a monthly basis, overall CPI rose 0.3%, the biggest jump in five months, while core inflation increased 0.2%.
This shows inflation is proving sticky, especially in essentials like food and transportation, with only slight relief in shelter costs. As a result, the U.S. Dollar Index (DXY) surged to 98.5, up 2.1% in July, as hopes for a rate cut in July faded.
Mixed Sentiment for Bitcoin
Although slightly lower-than-expected core inflation offered some optimism, the rising headline number has made markets cautious. Traders now lean toward a possible rate cut in September, with CME FedWatch showing a 54.3% probability, depending on upcoming data — especially this week’s Producer Price Index (PPI).
- A cooler-than-expected PPI could help Bitcoin push above $120,000.
- But if the PPI comes in hotter, Bitcoin may pull back toward $115,000 or even $110,000.
Key Levels to Watch
Bitcoin reached a yearly high of $123,218, but quickly fell back to $116,500, clearing out overleveraged traders and resetting momentum. Now, traders are watching these key zones:
- Bullish target: Bitcoin must reclaim the zone between $119,250 and $120,700, a critical resistance area where previous sell pressure caused a reversal. A strong breakout here would signal renewed momentum and open a path to new highs above $123,000.
- Support zones:
- A pullback to the $113,700–$115,300 range could act as healthy consolidation. This range aligns with the 200-day EMA, offering solid technical support.
- If pressure builds, Bitcoin could briefly test around $112,000, the former all-time high, before recovering.
Long-Term Outlook Remains Positive
Despite short-term uncertainty, analysts remain bullish. Crypto trader Magus called Bitcoin near $117,000 a “gift,” suggesting it’s a strong buy zone. Another investor, Jelle, expects Bitcoin to range between $116,000 and $118,000 before making another push above $120,000.
In short, Bitcoin is still in a strong uptrend — but its next move depends on key economic data this week. A decisive breakout or a deeper pullback will likely follow.
