The US inflation report will decide bitcoin's fate: why August 12 is the key date of the month
August 12th will become a bifurcation point for the entire crypto market. The release of July's U.S. consumer price statistics is not just another macroeconomic report. It is a trigger that will determine whether Bitcoin can overcome the psychologically important level of $70,000 or whether we will see a deep correction into the $60,000 zone and below. The whole intrigue lies in the Federal Reserve's reaction to this data.
The labor market has already sent a signal
The latest employment figures have thrown investor expectations into serious disarray. Instead of the expected job growth, the U.S. economy lost 23,000 positions in July, while unemployment unexpectedly fell to 4.1%. However, far more important is the revision of May and June data—the cumulative deterioration amounts to roughly 103,000 jobs. This is not a one-off glitch but a sustained cooling of the labor market. After such a release, the probability of a September rate hike collapsed from 55% to 41%.
Three scenarios for inflation
The consensus forecast for July inflation is around 3.4% year-over-year, with a core reading near 2.2%. However, as my analysis shows, the market will trade not the numbers themselves but their deviation from expectations. I highlight three key scenarios:
• Below forecast. Bond yields will move lower, and the technology sector and cryptocurrencies will benefit first. This is a bullish signal for Bitcoin.
• Within expectations (around 3.4%). Short-term volatility without a change in the overall picture. The odds of a September hike will remain balanced, giving the market time to consolidate.
• Acceleration to 3.5–3.6% and above. The market will return to tightening expectations, yields will rise, and both tech stocks and digital assets will come under pressure.
Of particular danger to the regulator is the combination of a weak labor market and high inflation. Raising rates in such a situation is risky for the economy, but ignoring rising prices is impossible. The historical correlation here is obvious: in February, April, and July, data came in below forecast and supported markets—after the July report, the Nasdaq gained more than a percent, and Bitcoin jumped from $62,000–63,000 to above $64,000. Conversely, on May 12th, when inflation exceeded expectations, we saw rising yields and powerful pressure on cryptocurrencies.
Oil, SpaceX, and the balance of power
The commodity factor should not be dismissed either. The sharp slowdown in June drove gasoline prices down, but by July the fuel factor had become unstable again. Brent has returned to the $83 area, while WTI consolidates above $75. Geopolitical tensions in the Middle East only add fuel to the fire. Against this backdrop, the situation with SpaceX shares deserves special attention—after a two-day decline, they rebounded sharply, even though about 911 million unlocked shares hit the market. The reason is the pre-priced expectation of a sell-off, short covering, and a strong report with quarterly revenue of $7.8 billion. However, free cash flow remains negative, and the space segment is unprofitable, so I expect a correction of 10–15% into the $108–114 zone.
As for Bitcoin, I view the current rebound as a false rally. Accumulation of liquidity from above, a return of local confidence, and then a new wave of decline toward $60,000 and below under strong pressure—that is my base scenario. From Monday through Wednesday, before the inflation data release, I forecast elevated volatility in both stocks and cryptocurrencies, with it being more pronounced in the equity market.
My verdict: do not expect a clear-cut move. The market is pricing in negativity, and even a match with the forecast could be read by bears as a reason to take profits. For confident Bitcoin growth, sustained inflation declines are needed in both August and September. Otherwise, the $70,000 level will remain an unattainable dream until the end of summer.