Key takeaways:
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June CPI data showed rising headline and core inflation, reducing expectations of an interest rate cut in July.
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Bitcoin must reclaim the $119,250–$120,700 zone to confirm bullish momentum and aim for fresh highs above $123,000.
Bitcoin (BTC) price rallied to $118,400 from $16,500 on Tuesday following the release of the June US Consumer Price Index (CPI), which showed inflation rising for the second straight month. Headline CPI hit 2.7% year-over-year, the highest since February, matching expectations but up from 2.4% in May. Core CPI also ticked higher to 2.9% annually, though it came in slightly below forecasts (3%). Overall CPI rose 0.3% month-over-month, the sharpest gain in five months, with core inflation up 0.2%.
The data underscores that inflation remains sticky, especially in key segments like food and transportation, while shelter prices have only marginally eased. Markets reacted cautiously, and the US Dollar Index (DXY) sharply rose to 98.5, up 2.1% in July.
Bitcoin’s short-term outlook draws mixed reception. The expected core figures offered some relief, but rising headline inflation dampened hopes of a dovish pivot at the July Federal Open Market Committee meeting. According to CME FedWatch, futures pricing still favors a 54.3% chance of a September cut, which could attain further confirmation from this week’s Producer Price Index (PPI) data.
Should the PPI be softer than expected, Bitcoin may regain control above $120,000. However, a hotter PPI print could trigger another pullback between $115,000 and $110,000.
While macroeconomic uncertainty lingers, Bitcoin remains well-positioned in a broader uptrend, but this week’s data could define whether the next move is a breakout or breakdown.
Related: Bitcoin speculators’ record cost basis boosts $100K support as BTC dives
Key Bitcoin levels to watch out for
After surging to a new yearly high of $123,218, Bitcoin retraced sharply to $116,500 on Tuesday, sweeping. The move neutralized overleveraged positions, resetting the market.
For bulls, the key zone to reclaim now lies between $119,250 and $120,700, an area of sell-side imbalance, where aggressive sellers previously pushed the price lower, leaving unfilled buy orders. A clean breakout above this range would signal renewed bullish momentum and open the door for fresh highs beyond $123,000.
However, a deeper correction appears more probable in the short term. Bitcoin could revisit the fair value gap between $113,700 and $115,300, a zone aligned with the 200-day EMA, which offers dynamic support. A bounce here would support the continuation of the broader uptrend. If selling pressure intensifies, BTC may retest the former all-time high around $112,000 before resuming its upward trajectory.
Irrespective of short-term volatility, the long-term market structure indicates that all Bitcoin dips are potential buy opportunities. Crypto trader Magus noted on X that BTC around the $117,000 is a “gift,” underlining the current strength of the rally.
Likewise, anonymous investor Jelle expected BTC to chop between $116,000 and $118,000 before it recaptures a position above $120,000.
Related: Bitcoin price drop to $114K possible as BTC whales take profits
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
