Bitcoin traders are closely watching the release of the latest US Consumer Price Index (CPI) data, with analysts warning that the inflation report could become the biggest driver of BTC’s short term price action as markets reassess the Federal Reserve’s interest rate path.
According to crypto trading firm BIT, macroeconomic developments are currently having a greater influence on Bitcoin than crypto specific news, especially as expectations for additional Fed tightening continue to build.
Inflation Data Could Shape Bitcoin’s Next Move
In its latest market update, BIT noted that investors are now pricing in approximately 2.6 Federal Reserve rate hikes over the coming quarters, marking a significant shift from the more accommodative outlook that helped fuel Bitcoin’s rally during the early stages of its current bull market in 2023.
The firm said monetary policy expectations have steadily become more restrictive since September 2025, creating a less favorable environment for risk assets, including cryptocurrencies.
BIT also highlighted recent comments from Federal Reserve Governor Christopher Waller, who suggested policymakers are approaching a critical point in determining the next phase of monetary policy. The firm believes that makes the upcoming inflation report particularly important for financial markets.
According to the analysts, a CPI reading above 4.0% would likely strengthen expectations for additional policy tightening and could increase selling pressure on Bitcoin.
The latest Federal Open Market Committee meeting left interest rates unchanged at 3.50% to 3.75%, but the meeting minutes revealed growing disagreement among policymakers over whether further rate increases may be necessary. Some officials raised concerns that artificial intelligence driven productivity gains could also contribute to inflationary pressures.
Meanwhile, the New York Federal Reserve’s latest consumer survey showed one year inflation expectations rising to 3.7%, the highest level since September 2023, following May’s CPI reading of 4.2%, a three year high.
Bitcoin Holds Steady Despite Market Uncertainty
Bitcoin was trading near $63,000 at the time of writing, posting little change over the previous 24 hours while remaining down roughly 1% over the past week.
Although July has historically been a strong month for Bitcoin, recent gains have been tempered by broader geopolitical uncertainty. The cryptocurrency rebounded from around $58,000 to briefly reclaim $64,000 before surrendering part of those gains as renewed tensions between the United States and Iran unsettled global markets.
Bearish Signals Persist Despite Recent Recovery
Not all analysts are convinced that Bitcoin’s recent rebound marks the beginning of a sustained recovery.
CryptoQuant’s Bull Score Index currently sits at 30, a level that remains firmly within bearish territory. Analysts at the firm argue the indicator needs to climb above 60 before any rally can be viewed as more than a temporary recovery within a broader downtrend.
BIT also pointed to additional headwinds beyond macroeconomic concerns. The market recently absorbed Strategy’s disclosure that it sold 3,588 BTC to fund dividend payments. While Bitcoin briefly fell by around $1,000 following the announcement, it recovered those losses within hours, suggesting investors had largely anticipated the sale.
With inflation data now taking center stage, traders are likely to remain focused on macroeconomic signals, as the outcome of the CPI report could determine whether Bitcoin resumes its recovery or faces renewed downside pressure.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
