BTC Eyes Reclaiming $120K on CPI Print and Fed Rate Cut Chances

The key take-aways

• The July US CPI remained at 2.7% over the previous year, increasing Fed rate-cut bets for September to 93.9%.

• The key price support is between $117.650 and $115.650. A deeper fall could test the CME gap of $95,000.

BitcoinBTCAfter the release of July’s US Consumer Price Index, which indicates inflation holding The CPI was unchanged from the previous month, and fell below the forecast of 2,8%. According to expectations, the core CPI (excluding energy and food) rose by 3.1% per year. Overall CPI, which was 0.3% higher in June, increased by 0.2% on a monthly level. Core CPI, however, rose 0.3%, up from 0.2%.

Data reinforce a slightly bullish background for Bitcoin as a cooling in inflation makes the case for more monetary ease, which is a good thing for assets with a high degree of risk. Lower interest rates reduce the cost of Bitcoin holdings, which could attract new capital to the market. 

According to the Federal Reserve, following the release of CPI, expectations on a rate reduction in September jumped to 93.9%. CME FedWatchAs traders price in an increased likelihood of monetary ease.

The in-line CPI core figure indicates that the Fed might still need more information before taking any action. 

Next week, the Producer Price Index (2.3% is estimated) and the Core PPI (2.5%) could prove to be crucial. If the print is softer than anticipated, it could be a confirmation of a bullish macro scenario for Bitcoin. It would also reinforce expectations for lower interest rates and increase demand for Bitcoin. 

Related: Bitcoin gets $95K target as ‘ugly’ BTC price candle spoils breakout

Bitcoin to Hit $130,000 In September?

Bitcoin’s price surged up to $122,190 on Monday, after a strong weekend. But gains proved short-lived, as it quickly dropped to $118.500. The daily closing above the $120,000 level was not achieved.

BTC recovers from the US CPI announcement to reach $119.500. A decisive close over $119.982 is needed to confirm an immediate uptrend. It would be an historic event if Bitcoin were to close the day above $120,000. This could spark the next leg in its rally.

Technically, the bullish pattern of the flag has recently broken to the upside on the chart. This current pullback may be just a test before the move to $130,000.

Titan of Crypto is a notable technical analyst projects On Sunday, the descending trendline was broken and a bullish scenario arose. The target is $137,000.

Failing to reach $120,000 would invite short-term downward pressure. Immediate support lies in the $117,650–$115,650 zone. This important support zone also coincides the CME gap created over the weekend. Traders should keep an eye on this area.

You can also read about the advantages of using noted Cointelegraph says that BTC, although it has a higher level, isn’t immune from losing $100,000 of support. An even deeper correction might test the levels down to $95,000.

Related: Bitcoin will make history at $340K if BTC beats last cycle’s 2,100% gains

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.