#CPIWatch The US inflation rate, as measured by the Consumer Price Index (CPI), was released today, August 12, 2025. Here's what you need to know¹:

- *Actual CPI*: 2.7%, which is lower than the expected 2.8%. This could lead to a higher chance of rate cuts in September.

- *Market Impact*: A softer CPI reading can boost expectations for a Federal Reserve rate cut, potentially leading to a rally in risk assets like cryptocurrencies. Conversely, a hotter CPI reading could lead to volatility or a pullback.

- *Crypto Market Reaction*: Given the lower-than-expected CPI, the crypto market might see a bullish trend, with potential rallies in Bitcoin and other digital assets.

Some potential market reactions to consider:

- *Rate Cut Probability*: With the current CPI reading, the probability of a rate cut in September has increased to around 95%.

- *Bitcoin Price Movement*: A good long position from lower levels could be a solid option, with potential resistance at $122k and support at $118k.

- *Volatility*: High volatility is expected around the CPI release, so it's essential to watch key levels closely.

Key takeaways:

- *Cooler Inflation*: Bullish for crypto, as it increases the likelihood of rate cuts.

- *Hot Inflation*: Bearish for crypto, as it may delay rate cuts.

- *Market Sentiment*: A CPI reading below 2.8% is seen as bullish, while a reading above 2.9% could lead to a sell-off.