Important takeouts:
The US CPI in July was stable at 2.7% year-on-year, with the Fed rate reduction bet increased to 93.9% in September.
The main price support ranges between $117,650 and $115,650, and could test the CME gap at $95,000.
Bitcoin (BTC) prices could continue to rise after the release of the US Consumer Price Index (CPI) in July. Core CPI, excluding food and energy, rose 3.1% a year, rising in line with expectations. Each month, the overall CPI increased by 0.2%, eased from 0.3% in June, with Core CPI rising by 0.3% against the previous 0.2% increase.
The data strengthens Bitcoin’s mild bullish background as it bolsters the case of monetary easing, a positive factor in risk-on assets. A low interest rate environment can reduce the opportunity costs of holding Bitcoin and draw fresh capital into the market.
Following the release of CPI data, market expectations for a Fed rate cut in September skyrocketed to 93.9%, according to CME FedWatch.
However, the inline core CPI figures suggest that underlying price pressures will continue, indicating that the Fed may need more evidence before taking action.
Going forward, next week’s producer price index (PPI, 2.3% estimate) and core PPI (estimated 2.5%) are important. Softer than expected printing can confirm Bitcoin’s bullish macro setup, strengthen expectations for lower rates, and increase demand for risky assets like Bitcoin.
Related: Bitcoin Gets $95,000 Goal to Ruin “Ugly” BTC Price Candle Breakout
Bitcoin will hit $130,000 in September?
After a bullish weekend, Bitcoin surged from Monday’s high to $122,190, but profits were short-lived as prices quickly fell 3% to $118,500 and failed to secure a one-day closure above $120,000.
Please post a US CPI release. The BTC rebounds to $119,500, but the critical range above $119,982 is key to seeing immediate extreme momentum. The nearest $120,000 a day is the historic first, and could set the next leg of the Bitcoin rally on fire.
Technically, the bullish flag pattern on the daily charts recently broke its advantages. The current pullback could be a retest before continuing to head towards its main $130,000 goal.
In particular, Crypto’s technical analyst Titan predicts a similar bullish scenario based on the downward trend breakout seen on Sunday, focusing on $137,000.
However, failing to regain $120,000 can lead to short-term downside pressure. Immediate support is in the $117,650-115,650 zone. This key support area also coincides with the CME gap formed over the weekend, making it an important zone for traders to watch.
As CointeLegraph pointed out, BTC is not entirely immune to losing its critical $100,000 support despite its high altitudes, and deeper fixes can test levels as low as $95,000.
Related: When BTC surpasses 2,100% profit in the last cycle, Bitcoin makes history at $340K
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.
