Bitcoin’s bullish momentum is accelerating after fresh U.S. inflation data strengthened the case for a Federal Reserve rate cut in September — a move that could inject even more optimism into crypto markets.
Inflation Holds Steady, Rate Cut Odds Soar
July’s Consumer Price Index (CPI) came in at 2.7% year-over-year, unchanged from June and below the 2.8% forecast. Core CPI, which excludes food and energy, rose 3.1% annually, matching expectations. On a monthly basis, overall CPI increased 0.2%, slightly easing from June’s 0.3% gain.
The numbers signal a stable inflation environment, which historically supports risk-on assets like Bitcoin. Lower rates reduce the opportunity cost of holding non-yielding assets, potentially drawing fresh capital into the crypto market. Following the data release, market expectations for a September rate cut surged to nearly 94%.
Macro Tailwinds for Bitcoin
A softer monetary policy environment could open the door for sustained upside in Bitcoin. Traders are now eyeing additional economic reports — including next week’s Producer Price Index — to confirm a fully bullish macro setup.
If inflation pressures continue to ease, the probability of the Fed cutting rates in September could solidify, adding further fuel to Bitcoin’s rally.
Technical Picture: Eyes on $120K Breakout
Bitcoin briefly touched $122,190 earlier this week before retreating to the $118,500 area. The $120,000 level remains a critical psychological and technical resistance. A daily close above this level would mark a historic milestone and potentially trigger the next leg higher toward $130,000 — and possibly $137,000 if bullish momentum holds.
A recently confirmed bullish flag breakout on the daily chart adds weight to this scenario. Analysts note that the current pullback may simply be a retest before continuation to the upside.
Key Levels to Watch
Immediate Resistance: $120,000
Primary Upside Target: $130,000–$137,000
Support Zone: $117,650–$115,650
Deeper Risk: $95,000 CME gap if broader market sentiment weakens
While Bitcoin’s macro and technical outlook remains strongly bullish, failure to reclaim $120,000 in the near term could invite short-lived pullbacks. Still, with cooling inflation and rising rate cut expectations, the broader setup points toward continued strength into September.