Important takeouts:
June CPI data showed a rise in headlines and core inflation, reducing expectations for July’s rate cuts.
Bitcoin needs to see bullish momentum and reclaim its zone from $119,250 to $120,700, aiming for a fresh high of over $123,000.
Bitcoin (BTC) prices rose to $118,400 from $16,500 on Tuesday, following the release of the US Consumer Price Index (CPI) in June. Headline CPI reached 2.7% year-on-year, the highest since February and is in line with expectations, but rose from 2.4% in May. CORE CPI rose to 2.9% per year, but slightly below forecast (3%). Overall CPI rose 0.3% per month, the sharpest increase in five months, with core inflation rising by 0.2%.
The data highlights that inflation remains sticky, especially in major segments such as food and transportation, but shelter prices have been slightly relaxed. The market responded cautiously, with the US Dollar Index (DXY) rising sharply to 98.5, with a 2.1% increase in July.
Bitcoin’s short-term outlook depicts mixed receptions. The expected core figure provided some relief, but rising headline inflation weakened hopes for a slit pivot at a meeting of the Federal Open Market Committee in July. According to CME FedWatch, futures prices remain favorable with a 54.3% chance of the September cut, and more confirmations can be obtained from this week’s Producer Price Index (PPI) data.
If the PPI is softer than expected, Bitcoin can regain control over $120,000. However, a hotter PPI print could trigger another pullback between $115,000 and $110,000.
While macroeconomic uncertainty remains, Bitcoin remains well placed with a broader upward trend, this week’s data can define whether the next move is a breakout or breakdown.
Related: Bitcoin Speculator’s Record Cost Base Increases $10,000 Support as a BTC Dive
Important Bitcoin Levels to Watch out for
Bitcoin was swept up to $116,500 on Tuesday after a surge to a new annual high of $123,218. The move has reset the market and neutralised positions.
For the Bulls, the key zone to regain is currently between $119,250 and $120,700. This is because aggressive sellers have previously lowered prices, leaving buy orders behind as aggressive sellers pushed prices forward. A clean breakout over this range will signal new intense momentum and open up the finest doors fresh, over $123,000.
However, in the short term, deeper corrections seem more likely. Bitcoin can revisit the fair value gap between $113,700 and $115,300, a zone along the 200-day EMA. Bounce here supports the continued wider uptrends. If sales pressures intensify, BTC could reconsider its previous all-time highs around $112,000 before resuming its upward trajectory.
Regardless of short-term volatility, the long-term market structure indicates that all Bitcoin dips are potential purchase opportunities. Crypto Trader Magus says that BTC, which costs around $117,000 on X, is a “gift,” highlights the strengths of the current rally.
Similarly, anonymous investor Jelle had hoped that BTC would chop between $116,000 and $118,000 before re-acquiring positions above $120,000.
Related: Bitcoin price could drop to $114,000 as BTC whales make profits
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
