Can Bitcoin Hold $60,000 Level Ahead of US CPI Data?

TradingKey - The U.S. is about to release July CPI data, putting pressure on Bitcoin as it risks losing the $60,000 mark.

On August 12, Bitcoin (BTC) fluctuated lower and lost the $64,000 level, down 0.39% intraday to trade at $63,736. Ahead of the upcoming U.S. July Consumer Price Index (CPI) data release, this reflects a lack of market investor confidence and growing bearish sentiment, putting the $60,000 level to the test.

In theory, a higher-than-expected CPI indicates sticky or rising inflation, making the Federal Reserve inclined to maintain high interest rates or even raise them. This drives up the U.S. Dollar Index (DXY) and U.S. Treasury yields, leading traditional capital to flow from high-risk assets like cryptocurrencies into risk-free dollar fixed-income products, which typically puts downward pressure on Bitcoin prices. Conversely, if CPI is lower than expected, it will spur capital inflows into risk assets, pushing up Bitcoin prices.

Currently, the market generally expects the upcoming U.S. July CPI (at 8:30 a.m. ET today) to cool further, with headline CPI YoY growth slowing to 3.4% from June's 3.5%, and core CPI YoY growth slowing to 2.5% from last month's 2.6%.

If CPI meets or falls below expectations, rate-cut expectations will be solidified, triggering short covering and institutional capital inflows, and Bitcoin prices may rise to challenge the $67,000 level—a rebound high over the past three months that has failed to break after multiple attempts; if it comes in higher than expected, Bitcoin will face volatile washouts, with a very high probability of losing $60,000 and retesting a low of $58,000.

Bitcoin price chart, Source: TradingView