Bitcoin is holding its breath awaiting the Fed's verdict: July inflation in the U.S. gave the market no new direction.
A fresh report on the U.S. Consumer Price Index (CPI) for July recorded annual inflation at 3.4%, fully matching the Wall Street consensus forecast. The core indicator, excluding volatile food and energy categories, slowed to 2.5%. However, for the cryptocurrency market, and especially for bitcoin, this data did not serve as a trigger: the probability of a Fed rate hike in September remains at "50/50," leaving traders in uncertainty.
The published statistics from the Bureau of Labor Statistics (BLS) showed that the monthly price increase was 0.1%, fully offsetting June's decline of 0.4%, which was the sharpest since April 2020. Annual inflation meanwhile slowed from 3.5% to 3.4%. Core CPI rose 0.2% on a monthly basis and 2.5% on an annual basis, also matching analyst expectations. Notably, even the most optimistic market participants, including traders on the Kalshi prediction platform, had expected softer figures—around 3.3%.
The Fed balances on the edge: pause or tightening?
According to CME FedWatch data, before the report's release, the odds of holding rates steady in September were estimated at 54.1%, while the probability of a 25-basis-point hike stood at 45.9%. A week earlier, markets were more inclined toward tightening—54.4%. After the data came out, the balance shifted again, but not dramatically. Weakness in the labor market, where July payrolls fell by 23,000 instead of the expected gain of 80,000, pushes the Fed toward a pause. However, inflation, still above the 2% target, demands decisiveness from the regulator.
Fed Chair Jerome Powell has held rates in the 3.50–3.75% range since May, ignoring pressure from President Donald Trump, who demands lower borrowing costs. At the July meeting, three board members voted for a hike, and this hawkish stance finds support among bond market traders. The latest data gave neither side a clear advantage: proponents of easing gained no new arguments, while advocates of tightening found no reason for panic.
Bitcoin holds the line, but options signal risks
At the time of the data release, BTC's price was near the $64,039 mark, losing a symbolic 0.2% over the day. The modest reaction reflects the essence of the situation: the risk of a "hot" inflation report has decreased, but expectations of a softer regulator policy have not strengthened. Notably, the options market retains a significant premium for protection: "puts" at the $60,000 level cost more than "calls" testing $70,000. This skew persists even on calm data, indicating general caution regarding the direction of monetary policy rather than a reaction to a specific release.
Traders meanwhile continue to build long positions at $70,000, which looks constructive but hedged. Before the September 16 meeting, the Fed will receive two more key reports—on August labor market data and PCE inflation. If they repeat July's calm, the odds of a pause will rise, and the macro backdrop for bitcoin will remain stable. Otherwise, the market faces another test of strength.
My view: the market is in a waiting phase, and the current BTC consolidation is not weakness but position accumulation ahead of a decisive macroeconomic impulse. The options structure clearly indicates that major players are pricing in a scenario of a local dip, yet they are not abandoning the bullish target of $70,000. The key risk is an unexpected inflation spike that would force the Fed to act more aggressively than expected.