FameEX Hot Topics | Bitcoin Traders Eye $137K as US CPI Boosts Fed Rate Cut Odds to 94%

Bitcoin’s price outlook remains positive following the release of July’s U.S. Consumer Price Index (CPI), which held steady at 2.7% year-over-year — unchanged from June and slightly below the 2.8% forecast. Core CPI, which excludes food and energy, rose 3.1% annually, matching expectations. On a monthly basis, overall CPI rose 0.2%, easing from June’s 0.3% gain, while core CPI increased 0.3%, slightly higher than the 0.2% rise in the previous month. These figures suggest inflation remains contained, offering a favorable backdrop for risk assets like Bitcoin.

Cooling inflation has strengthened the case for potential monetary easing, with lower interest rates reducing the opportunity cost of holding non-yielding assets such as Bitcoin. This environment could draw additional capital into the crypto market. Following the CPI announcement, CME FedWatch data showed that market expectations for a September Federal Reserve rate cut surged to 93.9%, reflecting growing confidence among traders in a looser monetary policy stance. While the stable core CPI reading signals that underlying inflationary pressures remain, it also suggests the Fed may require more evidence before committing to an easing cycle.

Traders will now turn their attention to next week’s Producer Price Index (PPI) data, with consensus estimates at 2.3% for PPI and 2.5% for Core PPI. Should these numbers come in softer than expected, it could further cement expectations for a rate cut and enhance the bullish macro setup for Bitcoin. Lower borrowing costs and improved liquidity conditions would likely boost demand for risk-on assets, potentially fueling another leg higher in Bitcoin’s price.

In price action, Bitcoin hit a Monday peak of $122,190 following a bullish weekend, but gains were quickly pared as the price fell 3% to $118,500, failing to close above $120,000. After the CPI release, Bitcoin rebounded to $119,500, with traders closely watching the $119,982 level as a near-term resistance. A decisive daily close above $120,000 would be a historic milestone, potentially triggering strong upside momentum toward the next rally phase.

From a technical perspective, Bitcoin recently broke out of a bullish flag formation on the daily chart, with the current pullback likely representing a retest before further gains. The primary technical target sits at $130,000, while prominent analyst Titan of Crypto projects an even more ambitious upside move toward $137,000 based on a descending trendline breakout. However, failure to reclaim $120,000 could invite near-term downside, with immediate support between $117,650 and $115,650 — an area that also aligns with a CME gap formed over the weekend.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.