Crypto news

The release of July U.S. inflation data, scheduled for August 12, will be the main trigger for the cryptocurrency market. This report will determine whether the Federal Reserve decides to raise the key interest rate in September and whether Bitcoin can overcome the psychologically important level of $70,000.

Analyzing the current macroeconomic picture, I conclude that the market is at a bifurcation point. Weak labor market data has already adjusted investor expectations, but the final verdict will be delivered by consumer inflation.

The labor market has cracked

The July employment report came as a surprise: the U.S. economy lost 23,000 jobs, although the consensus forecast had predicted growth. Unemployment meanwhile fell to 4.1%, but the key signal was the large-scale revision of data for May and June—the cumulative deterioration amounted to about 103,000 jobs. This is not a one-off glitch but a sustained cooling of the labor market.

The market reaction was swift: the probability of a September rate hike collapsed from 55% to 41%. This is a classic scenario where weak employment data pressures bond yields and boosts demand for risk assets, including Bitcoin.

Three scenarios for August 12

The consensus for July inflation is around 3.4% year-over-year, with a core reading near 2.2%. I highlight three key scenarios for how events may unfold:

• Below forecast. Bond yields will move lower, providing strong support for the technology sector and cryptocurrencies. This is the most bullish scenario for Bitcoin.

• In line with expectations (around 3.4%). The market will see short-term volatility without a change in the overall picture. The odds of a September hike will remain balanced.

• Acceleration to 3.5–3.6% and above. Yields will begin to rise, putting pressure on expensive tech stocks and cryptocurrencies. This is the worst-case scenario for digital asset holders.

A particular danger for the regulator is the combination of a weak labor market and high inflation—so-called stagflation. Raising rates under such conditions is risky for the economy, but ignoring rising prices is impossible. The historical correlation is clear: 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 $64,000+), while on May 12, inflation exceeded expectations and triggered sell-offs.

My base case is that the data will match expectations, but the market will read it negatively, since removing the threat of a rate hike requires sustained inflation declines in both August and September.

Oil, SpaceX, and Bitcoin: the balance of power

Middle East. Geopolitical tensions continue to support oil prices: Brent has returned to the $83 area, while WTI consolidates above $75. Any escalation could push prices higher, adding to inflationary risks.

SpaceX. The company's shares rebounded sharply after a two-day decline, despite the release of about 911 million unlocked shares. The reason is the pre-priced-in expectations of a sell-off and a strong report with quarterly revenue of $7.8 billion. However, free cash flow remains negative, and the space segment is unprofitable—Starlink provides the main cash flow. I see potential for a 10–15% correction into the $108–114 zone.

Bitcoin. I interpret the current bounce as a false rally: liquidity accumulation at the top, a return of local confidence, and then a new wave of decline toward $60,000 and below under strong pressure. The $65,000 level looks like an attractive zone for opening short positions—provided resistance is confirmed and momentum stalls.

From Monday through Wednesday, before the inflation data release, I expect elevated volatility in both stocks and cryptocurrencies, with the stock market seeing more pronounced moves.

My verdict: August 12 will be judgment day for Bitcoin. If inflation disappoints—expect a test of $60,000. If the data comes in weak—the road to $70,000 is open. Manage your risks.