Bitcoin’s key test is under $120K after sticking CPI print

The key takeaways

• The June CPI showed a rise in headline inflation and core inflation. This reduced expectations for a rate reduction in July.

• Bitcoin must reclaim the $119,250–$120,700 zone to confirm bullish momentum and aim for fresh highs above $123,000.

BitcoinBTCThe price of the. rose to $118.400 on Tuesday from $16,500. release The US Consumer Price Index for June showed that inflation was rising for the second consecutive month. The headline CPI reached 2.7% over the past year, which was higher than expected but still below expectations. Although it was slightly lower than expected (3%), core CPI rose to 2.9%. Core CPI was up 0.2%, while overall CPI was up by 0.3%. This is the highest gain for five months.

These data show that food, transportation and shelter are still experiencing high inflation, while prices in other segments have barely eased. The markets reacted with caution, as the US Dollar Index (DXY), which measures inflation, rose sharply to 98.5 in July, an increase of 2.1%. 

Bitcoin’s near-term prospects are met with mixed reactions. Although the expected core numbers provided some comfort, rising headline inflation dampened expectations of a more dovish stance at the Federal Open Market Committee’s July meeting. According to CME FedWatchThe Producer Price Index data for this week could confirm that the futures prices still favour a 54.3% probability of a cut in September.

Bitcoin could regain its control if the PPI is softer than anticipated. If the PPI is hotter than expected, it could lead to another decline between $115,000-$110,000. 

Bitcoin is well-positioned to continue its upward trend, despite macroeconomic uncertainties. This week’s numbers could determine whether Bitcoin makes a break or a breakdown.

Related: Bitcoin speculators’ record cost basis boosts $100K support as BTC dives

Bitcoins levels you need to be aware of

In the wake of a record-breaking year, $123,218, Bitcoin On Tuesday, the market plunged to $116.500. This move erased overleveraged position, and reset the market.

Bulls must now reclaim the zone between $119.250 and $120.700, where there was a sell-side imbalance. Aggressive sellers had previously driven the price down, leaving open buy orders. This range is the key to a new bullish trend and a fresh peak beyond $123,000.

In the short-term, however, it appears that a more severe correction will be likely. Bitcoin might revisit the fair-value gap between $113.700 to $115.300. The zone lies along the 200 day EMA and offers dynamic support. If the price bounces back here, it would help support the continuation in the uptrend. BTC might retest $112,000, its previous all-time peak before it resumes its upward trend if the selling pressure is intensified.

The long-term structure of the market indicates that any dip in Bitcoin is a potential buying opportunity. Magus Crypto Trade noted On X the BTC that is $117,000 around it, this is a “gift,” The rally’s current strength is highlighted. 

Anonymous investor Jelle expected BTC is expected to cut between $116,000-$118,000 before it can regain a position over $120,000. 

Related: Bitcoin price drop to $114K possible as BTC whales take profits

The article is not intended to provide investment advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.