Bitcoin rebounded to $64,100, recovering from a daily low of $63,400, after the United States Bureau of Labor Statistics announced the July 2026 inflation data. The Consumer Price Index (CPI) rose 0.1% month-on-month and 3.4% year-on-year - figures that aligned exactly with market expectations.
The report also showed that core CPI, which excludes fluctuations in food and energy prices, rose 0.2% in July and 2.5% year-on-year. The annual pace of core inflation slowed compared to the 2.6% recorded in June. Prior to the inflation data release, market sentiment was weighed down by uncertainty surrounding the US-Iran conflict and escalating tensions in the Strait of Hormuz, which continue to pressure appetite for risk assets.
Interest Rate Direction Remains Unclear
The inflation figures matching expectations have not yet provided certainty regarding the direction of the Fed’s policy. The 3.4% inflation rate remains above the central bank’s 2% target, a fundamental condition that limits the room for monetary easing in the near term.
On the Polymarket prediction platform, the probability of the Fed holding interest rates steady at the September meeting dominates at 67%, while the likelihood of a 25-basis-point hike is recorded at 34%. For the overall 2026 projection, the chance of at least one rate hike remains in the range of 55%.
Ryan Lee of Bitget Research noted that this in-line CPI data does not provide a clear signal in either direction. Market participants’ attention has now shifted directly to searching for further clues from the Jackson Hole economic symposium and upcoming data releases, including the Producer Price Index (PPI) figures scheduled to be released on August 13.
Spot Prices Rise, Options Market Defensive
The rise in Bitcoin spot prices has not translated into aggressive sentiment in the derivatives market. Andrei Grachev of DWF Labs revealed that options contracts positioning Bitcoin to fall to $60,000 by the end of August are now priced higher than options for a rise to $70,000. This difference in premium indicates the market is still mounting a defense against downside risk.
From a macro perspective, Gadi Chait of Xapo Bank reminded of Bitcoin’s sensitivity to liquidity supply. History confirms that this asset rallies strongly in the midst of abundant liquidity and a low interest rate environment. Continuing on liquidity, Fabian Dori of Sygnum Bank projects that medium-term money supply conditions will remain relatively unchanged. The determining variables going forward depend on movements in the Treasury cash balance, adjustments to the enhanced supplementary leverage ratio (eSLR) rules, private credit distribution, and stablecoin adoption.
For technical analysis observers, the trend-determining boundary is already marked on the chart. Bitcoin needs two daily closes above the $68,300 level to invalidate the current horizontal consolidation structure. As long as that level remains unbroken, the old price range will continue to confine the movement of the asset.
Sourced from crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
