The US inflation report will decide the fate of Bitcoin: why August 12 will be a turning point
The cryptocurrency market is holding its breath ahead of a key release: U.S. inflation data for July, due out on August 12, will be the decisive signal for bitcoin's next move. This report will determine whether the Federal Reserve opts for a rate hike as early as September — and that, in turn, will directly affect the leading cryptocurrency's ability to break through the psychologically important level of $70,000.
The labor market shifts the balance
Fresh employment statistics have already adjusted investor expectations. In July, the U.S. economy lost 23,000 jobs, even though the market had forecast growth. The unemployment rate, meanwhile, fell to 4.1%. However, a far more alarming signal came from the revision of May and June data: the combined deterioration amounted to roughly 103,000 jobs. This is not a one-off glitch but a sustained trend of a cooling labor market.
After that release, the probability of a September rate hike collapsed from 55% to 41%. Labor market weakness creates a dilemma for the regulator: tightening policy amid a slowing economy is extremely risky, but ignoring inflationary pressure is equally impossible.
Three scenarios for the market
The consensus forecast for July inflation is around 3.4% year-over-year, with a core reading of 2.2%. I see three possible scenarios going forward:
• Below forecast. Bond yields will head lower, providing a powerful catalyst for the tech sector and cryptocurrencies. In this case, bitcoin would get a chance at a confident push above current levels.
• In line with expectations (around 3.4%). The market will remain in a state of short-term volatility without a trend shift. The odds of a September hike will persist but will not be dominant.
• Acceleration to 3.5–3.6% or higher. Yields will begin to rise, putting pressure on risk assets. In this scenario, both expensive tech stocks and cryptocurrencies would come under fire.
The historical correlation is clear: in February, April, and July, when data came in below forecasts, markets received support — the Nasdaq gained, and bitcoin rose from $62,000–63,000 to above $64,000. Conversely, on May 12, when inflation exceeded expectations, yields spiked and cryptocurrencies came under pressure.
Oil, SpaceX, and bitcoin: the balance of power
An additional risk factor is instability in the oil market. After June's slowdown, gasoline prices became volatile again in July. Brent has returned to $83, while WTI is consolidating above $75. Geopolitical tensions in the Middle East, including the situation around the Strait of Hormuz, add to the uncertainty.
Special attention is due to SpaceX shares: a sharp rebound after a two-day decline amid the release of 911 million unlocked shares points to sell-off expectations that had already been priced in. However, free cash flow remains negative, and the space segment is loss-making — only Starlink provides stability. The next tranche of unlocks is scheduled in 70 days, creating potential for a 10–15% correction into the $108–114 zone.
Bitcoin itself, in my view, is showing a false rally: liquidity accumulation from above, a return of local confidence, and then — a new wave of decline toward $60,000 and below under strong pressure. From Monday through Wednesday, ahead of the inflation data release, elevated volatility should be expected in both stocks and cryptocurrencies, with the equity market seeing more pronounced swings.
My professional conclusion: August 12 is not just another statistical release but a moment of truth for the entire risk-asset market. If inflation comes in below forecast, bitcoin will gain a strong argument to attack $70,000. But if price pressure accelerates, the correction in cryptocurrencies could be deeper than most market participants expect. Investors should determine their entry and exit levels in advance, rather than relying on emotional crowd reactions.