Bitcoin tests key resistance as inflation data loom

Bitcoin tests a key resistance as inflation data loom and traders weigh a possible Fed rate cut.

Bulls Have Another Go at the Fibonacci Golden Ratio Above $122K as Inflation Data Looms

Bitcoin rose to about $122,000, testing the 1.618% Fibonacci extension traced from the 2018 and 2022 bear-market lows. The move marks a fresh attempt to clear a long-standing resistance and keep momentum alive after a earlier push that failed to hold. Traders pointed to sizable open interest at the $140,000 call on Deribit, signaling bets on further upside if price action stays constructive. A clean hold above the level could tilt sentiment toward a run at higher targets, though a failure to sustain gains would suggest buyers still need conviction.

All eyes turn to U.S. inflation data due Tuesday. Economists expect the core CPI to rise 0.3% in July, with tariffs from prior policy lifting price pressures. A hotter print could spark volatility in the near term, but analysts say it should not derail a likely Fed rate cut in September. Marc Chandler of Bannockburn Global Forex noted that a continued dollar downtrend after the CPI would enhance upside for risk assets, including crypto.

The price action shows how technical signals still move markets even as macro data drive the bigger picture. The Fibonacci level is a magnet for traders who ride chart patterns, but it is not a guarantee of a breakout. The real test will come from macro momentum, the liquidity environment, and how crypto assets react to policy signals. A second failed test at the resistance could trigger a pullback that exposes the fragility of the bounce and reminds investors that crypto markets remain highly sensitive to inflation surprises.

Beyond the chart, the inflation data highlights how policy paths shape risk appetite. If the CPI comes in hotter than expected, volatility could rise and short-term risk sentiment could wobble. Yet the market appears to have priced in a September rate cut, which would keep the dollar weak and support interest in higher-risk assets. The coming days may show whether crypto can hold its gains as traditional markets adjust to the data flow.

Highlights

The path forward will depend on how data and policy signals interact with chart-driven price action.