US inflation will decide bitcoin's fate: why August 12 is the key date of the month
The release of July U.S. inflation statistics, scheduled for August 12, will be the main trigger for the cryptocurrency market. This data will determine whether the Federal Reserve decides to raise interest rates as early as September. This verdict will directly determine whether Bitcoin can break through the psychologically important level of $70,000 or whether we will see another wave of correction.
The focus is on consumer price dynamics and their impact on the Fed's monetary policy. Fresh labor market data has already adjusted investor expectations. In July, the U.S. economy lost 23,000 jobs, although the market had forecast growth, while the unemployment rate fell to 4.1%. However, a far more alarming signal was the revision of data for May and June: the cumulative deterioration amounted to approximately 103,000 jobs. This points not to a one-off glitch but to a sustained cooling of the labor market.
After the employment report was published, the probability of a September rate hike collapsed from 55% to 41%. Now all attention is focused on inflation. The consensus forecast suggests annual inflation of around 3.4% with a core reading of 2.2%. A particular risk is tied to the oil factor: in June, gasoline prices fell sharply, providing a disinflationary effect, but by July the fuel component had again become unstable.
Three scenarios for the market
I identify three possible scenarios, each of which will have a different impact on Bitcoin and risk assets.
• Inflation below forecast. Bond yields will move lower, which would be a powerful catalyst for the technology sector and cryptocurrencies. In this scenario, Bitcoin has every chance of a rapid surge toward $70,000.
• A reading in line with expectations (around 3.4%). The market will likely react with short-term volatility without changing the overall picture. The probability of a September rate hike will remain balanced, allowing Bitcoin to consolidate in its current range.
• Acceleration to 3.5–3.6% and above. This would be the worst-case scenario for risk assets. The market would return to expectations of tightening, yields would rise, and expensive tech stocks and cryptocurrencies would come under pressure. In this case, Bitcoin risks falling to $60,000 and below.
The historical correlation here is clear. In February, April, and July, when data came in below forecasts, markets rose: after the July report, the Nasdaq gained more than a percent, and Bitcoin climbed from $62,000–63,000 to above $64,000. Conversely, on May 12, when inflation exceeded expectations, yields spiked and cryptocurrencies came under severe pressure.
In my view, the base case is that data matches expectations, but the market may read it negatively. To remove the threat of a rate hike, two consecutive months of declining inflation are needed—both in August and September. That is too optimistic a scenario, so I expect elevated volatility in both directions. As for Bitcoin, I view 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. My recommendation is to prepare for a short in the $65,000 zone upon confirmation of a reversal, but with a mandatory stop order above local highs.