The US inflation report will decide bitcoin's fate: why August 12 is the key date of the month
The cryptocurrency market is holding its breath in anticipation: the release of U.S. inflation data for July, scheduled for August 12, will be the trigger that determines the trajectory of Bitcoin's movement over the coming weeks. These figures will directly determine whether the Federal Reserve decides to raise the key interest rate in September, and whether the leading cryptocurrency can break through the psychologically important level of $70,000.
Labor Market Weakness Changes the Picture
The latest macroeconomic data have made significant adjustments to investor expectations. Fresh employment statistics proved disappointing: in July, the U.S. economy lost 23,000 jobs, although the market had forecast growth. The unemployment rate fell to 4.1%, but the key signal was the massive revision of data for May and June—a cumulative deterioration of about 103,000 jobs. This is no longer a one-off glitch, but a sustained trend of cooling in the labor market.
The market reacted instantly: the probability of a September rate hike collapsed from 55% to 41%. Nevertheless, the Fed's final decision will depend precisely on the July consumer price report. The consensus forecast suggests inflation at 3.4% year-on-year, with a core reading of around 2.2%. An additional factor of uncertainty remains the volatility of oil prices—after the June decline, the fuel factor has once again become a destabilizing force.
Three Scenarios for the Market
Three baseline scenarios for how events unfold can be identified. If the data come in below forecasts, bond yields will move lower, which would be a powerful catalyst for the technology sector and cryptocurrencies. If it matches expectations around 3.4%, the market faces short-term volatility without a change in the overall picture. The most negative scenario—an acceleration of inflation to 3.5–3.6% and above—would bring expectations of tightening back to the market, putting pressure on risk assets, including Bitcoin.
Especially dangerous for the regulator is the combination of a weak labor market with high inflation—the so-called stagflation trap, where raising the rate is harmful to the economy, yet ignoring rising prices is impossible. The historical correlation is clear: in February, April, and July, when data came in below forecasts, markets rose—Nasdaq gained more than one percent, and Bitcoin climbed from $62,000–63,000 above $64,000. Conversely, on May 12, when inflation exceeded expectations, yields soared and cryptocurrencies came under pressure.
Balance of Forces for the Week
Beyond macroeconomics, the market will be watching geopolitics. The escalation in the Middle East continues to support oil prices: Brent has returned to $83, while WTI consolidates above $75. Special attention deserves the situation around SpaceX—after a two-day decline, the stock rebounded sharply despite the release of about 911 million unlocked shares. Quarterly revenue of $7.8 billion was strong, but negative free cash flow and a loss-making space segment leave room for a 10–15% correction into the $108–114 zone.
Bitcoin itself is showing signs of a false rally. Liquidity accumulation at the top, the return of local confidence, and then a new wave of decline toward $60,000 and below—this is a likely scenario if pressure persists. Until the inflation data release on Wednesday, elevated volatility should be expected in both stocks and cryptocurrencies, with it being more pronounced in the equity market.
My view: the market is at a bifurcation point, and August 12 will be the moment of truth. If inflation disappoints, Bitcoin risks losing support at $64,000 and moving toward $60,000. However, with weak data, a window opens for an assault on $70,000—but that will also require confirmation of the trend in the August report. Investors should prepare for sharp movements and avoid opening positions without a clear stop-loss.