Bitcoin traders are boosting their price target to $137,000 as Federal Reserve rate cut odds surge following the latest US Consumer Price Index (CPI) report.
Key Takeaways:
July’s US CPI remained steady at 2.7% year-over-year, pushing Fed rate cut probabilities to 93.9% for September.
Critical support levels for Bitcoin are identified from $117,650 to $115,650, with potential downside risk testing a CME gap near $95,000.
Bitcoin (BTC) has a promising outlook following the release of July’s US CPI data, which held at 2.7% annually, matching June’s figures and slightly below forecasts of 2.8%. Core CPI, which excludes food and energy, increased 3.1% year-over-year as anticipated. Monthly figures show overall CPI rising 0.2%, easing from June’s 0.3%, while core CPI increased 0.3% compared to 0.2% previously.
The data signals a mildly bullish environment for Bitcoin as cooling inflation bolsters expectations for monetary easing. Lower interest rates diminish the opportunity cost of holding BTC, potentially attracting new investment into the cryptocurrency market.
Following the CPI report, market projections for a September Fed rate cut soared to 93.9%, according to the CME FedWatch tool. Traders now anticipate a higher likelihood of easing monetary policy. However, persistent core inflation suggests the Fed may require additional evidence before adjusting rates.
Forthcoming economic reports such as the Producer Price Index (PPI), with estimates at 2.3% for PPI and 2.5% for Core PPI, will be crucial. A softer-than-expected reading could strengthen bullish signals for Bitcoin by reinforcing expectations for rate cuts and enhancing demand for risk assets.
Related: Bitcoin targets $95K as a bearish candle disrupts breakout momentum
Could Bitcoin reach $130,000 this September?
After a bullish weekend, Bitcoin reached highs of $122,190 on Monday, though it struggled to maintain gains, pulling back 3% to $118,500 and failing to close above the pivotal $120,000 daily mark.
Post-CPI, BTC rebounded to $119,500, yet securing a daily close above $119,982 is essential to confirm strong upward momentum. Breaking above $120,000 daily would mark a historic milestone and might trigger the next upward rally phase.
Technical analysis shows a bullish flag pattern breakout on Bitcoin’s daily chart. The current correction may serve as a retest ahead of a move toward the main target of $130,000.
Notably, technical analyst Titan from Crypto projects a similar bullish trajectory, eyeing a $137,000 target following a descending trendline breakout observed recently.
Failure to reclaim $120,000 could lead to short-term declines, with crucial support found between $117,650 and $115,650—also coinciding with a weekend CME gap, a key focus for traders.
As noted by Cointelegraph, despite Bitcoin retaining higher levels, it remains vulnerable to falling below the critical $100,000 support, with a significant correction potentially testing $95,000.
Related: Bitcoin could set history at $340K surpassing previous 2,100% cycle gains
This article does not offer investment advice. Trading and investing involve risks; readers should conduct their own research before making decisions.
