Bitcoin Tests Crucial Technical Level Ahead of U.S. Inflation Report
Bitcoin (BTC) is once again challenging a key resistance zone, trading just above $122,000 as investors brace for Tuesday’s U.S. inflation data. The move marks another test of the 1.618 Fibonacci extension level—a significant technical marker derived from the 2018 and 2022 bear market lows, often associated with the “golden ratio.”
The level, widely followed by technical traders for its psychological and structural significance, could be pivotal for Bitcoin’s next move. A successful breakout may clear the path toward $140,000, currently the top open interest call option strike on Deribit, with over $3 billion in notional interest.
This is Bitcoin’s second major attempt to overcome the golden ratio resistance. In July, bulls briefly pushed past the level but failed to hold it, resulting in a pullback below $112,000. Sustained momentum above $122K would reinforce bullish sentiment, while another failure could spark a deeper correction.
At the time of writing, BTC is trading around $122,000, after reaching an intraday high of $122,171 during early Asian hours, according to CoinDesk data.
Inflation Data in Focus, but Fed Cut Expectations Hold Firm
Market attention now turns to July’s Consumer Price Index (CPI), set for release Tuesday. Consensus estimates point to a 0.3% monthly increase in core CPI, slightly higher than June’s 0.2%, reflecting upward pressure from recent Trump-era tariff adjustments.
While a hotter-than-expected reading could jolt short-term volatility, analysts believe it’s unlikely to derail expectations for a Federal Reserve rate cut in September.
“Despite softer demand at last week’s U.S. bond auctions, interest rates remain near the lower end of their range,” said Marc Chandler, Chief Market Strategist at Bannockburn Global Forex. “We believe markets are bracing for what could be a third straight monthly uptick in year-over-year CPI. Still, the dollar’s downtrend is likely to resume following the report.”
Chandler added that the weak July jobs report marked a turning point, solidifying bets on Fed easing and stalling the U.S. dollar’s recovery. Continued weakness in the greenback would likely benefit risk assets, including cryptocurrencies.
