Bitcoin Price Outlook Amid US Inflation Data and Fed Rate Uncertainty: Key Support at $116,300

On July 16, the US Consumer Price Index (CPI) for June revealed a month-on-month increase of 0.3%, aligning with market forecasts. The annual CPI rose to 2.7%, primarily influenced by elevated food and energy costs. Meanwhile, the core CPI, which excludes volatile items, edged up by just 0.2%, reflecting easing prices in sectors such as new vehicles, airline fares, and lodging. This data suggests that underlying inflationary pressures remain relatively contained.

Despite these figures, BlackRock cautions that the inflationary impact of tariffs has yet to be fully absorbed by the economy. As corporate inventories diminish, inflationary risks could persist, complicating the Federal Reserve’s monetary policy outlook. While markets anticipate a possible interest rate reduction in September, the Fed’s stance appears increasingly measured and vigilant.

According to analysts at Bitunix, Bitcoin (BTC) is navigating a volatile phase amid conflicting signals from inflation expectations and potential rate cuts. They advise a conservative trading approach in the near term, noting that the $116,300 support level remains critical. A breach below this threshold warrants caution, whereas surpassing the $118,500 resistance could signal a bullish reversal. Investors are advised to avoid aggressive short-term buying and await clear indications of capital inflows before committing.

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