The release of US inflation data on August 12 will be a key trigger for Bitcoin.
August 12th is not just another Monday for the digital asset market. On this day, the U.S. Department of Labor will release the July Consumer Price Index (CPI), and these very numbers will be the decisive factor for Bitcoin's trajectory in the coming weeks. The question is stark: will the leading cryptocurrency manage to hold above the $70,000 mark, or are we in for another wave of correction down to $60,000 and below?
Why the CPI Report Matters More Than It Seems
Fresh U.S. employment data has already adjusted market expectations. The July report showed a loss of 23,000 jobs instead of the expected gain, while the unemployment rate fell to 4.1%. However, what is more telling is the massive revision of May and June data—combined, they were downgraded by nearly 103,000 jobs. This is not a one-off glitch but a sustained trend of cooling in the labor market, which automatically reduced the probability of a Fed rate hike in September from 55% to 41%.
Now all attention is focused on inflation. The consensus forecast for July CPI is around 3.4% year-over-year, with a core reading of 2.2%. However, there is a significant risk factor—oil. After June's slowdown in gasoline prices, the fuel component became unstable again in July, which could spring a surprise.
Three Scenarios for the Market
• Below-forecast scenario. If inflation comes in lower than expected, bond yields will decline, providing strong support for the tech sector and cryptocurrencies. This is the most bullish scenario for Bitcoin.
• In line with expectations (around 3.4%). The market will likely react with short-term volatility without changing the overall picture. The odds of a September rate hike will remain balanced.
• Acceleration to 3.5–3.6% and above. This would bring expectations of policy tightening back to the market. Yields will rise, and high-risk assets, including cryptocurrencies, will come under pressure first.
The historical correlation here is obvious: when CPI data came in below forecasts (as in February, April, and July), markets received support. For example, after the July report, the Nasdaq rose by more than one percent, and Bitcoin climbed from $62,000–63,000 to $64,000. Conversely, on May 12th, when inflation exceeded expectations, yields spiked and cryptocurrencies came under pressure.
My Analysis and Forecast
In my view, the base case is data matching expectations, but the market may read it negatively. To fully remove the threat of a rate hike, two consecutive months of low inflation are needed—both in August and September. Therefore, I expect heightened volatility through Wednesday: in both stocks and cryptocurrencies, with the stock market seeing more pronounced moves.
As for Bitcoin, I view 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—that is the most likely scenario under strong pressure. My strategy is to look for a short entry point around $65,000, waiting for momentum to stall and confirmation of seller pressure. Investors should be extremely cautious and not succumb to euphoria from short-term moves.