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U.S. Consumer Price Index (CPI) reported a 2.7% year-over-year increase for July, slightly below the expected 2.8%, with core CPI rising 3.1% against a forecast of 3.0%. This tame inflation data, coupled with a weakening labor market, has raised expectations for a Federal Reserve rate cut in September, with a 90% probability of a 25-basis-point reduction to 4.00–4.25%, per CME FedWatch. Bitcoin (BTC) rose 1.02% to $119,745, signaling potential bullish momentum for risk assets.
Technical Analysis: Key Levels to Watch
Bitcoin is testing resistance between $117,335 and $123,250, supported by an ascending trendline and the 50-day SMA at $114,396. A daily close above $123,250 could drive BTC to $127,000–$130,000, while a break below $113,650 risks a drop to $110,675. The RSI at 61 and a bullish MACD crossover suggest room for upside, though indecision candlesticks hint at possible consolidation.
Macro Factors and ETF Inflows
A dovish Fed outlook, driven by cooling inflation and a 4.3% unemployment rate, could boost BTC, especially with $12.8 billion in spot Bitcoin ETF inflows in 2025. However, concerns over data quality—35% of June’s CPI relied on imputation—and Trump’s tariffs may temper optimism. Posts on X reflect cautious sentiment, with traders eyeing $118,000 as a key pivot.
Outlook for Investors
Bitcoin’s path hinges on breaking $123,250 or holding $113,650 support. A rate cut could propel BTC past its $123,000 peak, but volatility risks remain. Investors should monitor volume and Fed signals.
