US inflation will decide bitcoin's fate: why August 12 is the key date of the month
The release of July U.S. inflation data, scheduled for August 12, will be the main trigger for the cryptocurrency market this month. This report will determine whether the Federal Reserve decides to raise the key interest rate in September, which will directly impact Bitcoin's ability to break through the $70,000 mark.
Ahead of this date, the market is in a state of heightened uncertainty. Weak labor market data has already adjusted investor expectations regarding monetary policy tightening. The July report showed a loss of 23,000 jobs against growth forecasts, while the unemployment rate fell to 4.1%. However, a more alarming signal was the revision of May and June data: the cumulative deterioration amounted to about 103,000 jobs. This is not a one-off glitch but a sustained trend of a cooling labor market. The probability of a September rate hike after this release dropped from 55% to 41%.
Three scenarios for the market
The consensus forecast for July inflation is around 3.4% annualized with a core reading of 2.2%. However, risks are skewed toward rising energy prices: after the June slowdown, the oil factor has again become volatile. I highlight three key scenarios for how events may unfold:
• Data below forecasts. Bond yields will move lower, providing support to the technology sector and cryptocurrencies. This is the most bullish scenario for Bitcoin.
• A reading in line with expectations (around 3.4%). Short-term volatility without a change in the overall picture. The odds of a September hike will remain balanced, which the market will perceive neutrally.
• Acceleration to 3.5–3.6% and above. The market will return to tightening expectations, yields will rise, and expensive assets—from tech stocks to cryptocurrencies—will come under pressure.
The worst combination for the regulator is a weak labor market coupled with high inflation. Raising rates under such conditions is dangerous for the economy, but ignoring rising prices is impossible. The historical correlation here is obvious: in February, April, and July, data came in below forecasts and supported markets—after the July report, the Nasdaq gained more than a percent, and Bitcoin rose from $62,000–63,000 to above $64,000. Conversely, on May 12, inflation exceeded expectations, triggering a rise in yields and pressure on the crypto market.
Oil, SpaceX, and Bitcoin: the balance of forces for the week
Geopolitical tensions in the Middle East continue to fuel oil prices: Brent has returned to $83, while WTI consolidates above $75. On a pullback to $74, I am considering opening long positions with a target of an 8–10% move.
Special attention deserves the situation around SpaceX. The company's shares rebounded sharply after a two-day decline, despite about 911 million unlocked shares hitting the market—more than the initial free float after the IPO. 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, with capital expenditures of around $18.4 billion, free cash flow remains negative, and the space segment is unprofitable. The main stable cash flow is provided by Starlink. The unlock is not complete: the next tranche is scheduled in 70 days. I see potential for a short position with a target of a 10–15% correction into the $108–114 zone.
As for Bitcoin, I interpret the current bounce as a false rally. Accumulation of liquidity above, the return of local confidence, and then a new wave of decline toward $60,000 and below under strong pressure—this is my base scenario. I have already fully closed my long from the $58,000 area and am looking for a short entry point in the $65,000 zone, expecting a trigger in the form of momentum exhaustion, resistance formation, and confirmation of seller pressure. From Monday through Wednesday, up until the inflation data release, I forecast heightened volatility in both stocks and cryptocurrencies, with the equity market seeing more pronounced moves.
My professional conclusion: August 12 is not just another statistical release but a moment of truth for the entire spectrum of risky assets. If inflation surprises to the upside, Bitcoin could lose its current support levels faster than many expect. Investors should prepare for increased turbulence and avoid opening large positions until the data is released.