Bitcoin Rises as U.S. Inflation Hits Three-Year High, Market Watches Price Outlook

The U.S. consumer price index is a key input for Federal Reserve policy and a major driver of liquidity-sensitive assets, including cryptocurrencies. Inflation has retreated sharply from its post-pandemic peak, but underlying price pressures remain above the Fed’s 2% target. That tension has kept traders weighing the prospect of lower interest rates against the risk that persistent inflation delays or limits monetary easing.

The Bureau of Labor Statistics said on Aug. 12 that headline CPI rose 0.2% in July 2025 and 2.7% from a year earlier. Core CPI increased 0.3% on the month and 3.1% annually, underscoring stickier inflation beneath the mild headline reading. Bitcoin traded near $119,000 and Ether around $4,400 as major tokens consolidated, while smaller assets including OKB and MNT advanced. Bitcoin’s share of total crypto market value held near 59%.

Cryptocurrencies are high-risk assets whose price movements are closely tied to Federal Reserve monetary policy. Inflation pressures have returned to the forefront since the U.S. Bureau of Labor Statistics released its latest producer-price data. The figures directly influence interest-rate decisions by the Federal Open Market Committee and could determine global capital flows and whether the bull market in digital assets can continue.

Bitcoin and Ether’s rallies slowed markedly on Tuesday, July 14, 2026, after the inflation data. Investors expect the Fed to leave its benchmark interest rate unchanged at its policy meeting later this month. The latest data from decentralized prediction platform Polymarket put the probability of no rate change at 93%, as markets adopted a more cautious response to macroeconomic signals.

The US Bureau of Labor Statistics' core Consumer Price Index (CPI) excludes volatile food and energy prices. It is a key gauge used by the Federal Reserve to assess inflation trends and interest-rate policy. Cooling inflation data typically benefits risk assets and can also affect cryptocurrencies such as Bitcoin.

US core CPI rose 0.2% month on month in March, below market expectations of 0.3%. Bitcoin climbed to about $72,400 after the data was released and briefly touched $73,000 intraday. However, markets still see little likelihood of a Federal Reserve rate cut in April.

Bitcoin often moves in tandem with risk assets such as U.S. stocks. Rising oil prices could increase transportation and production costs, delay Federal Reserve interest-rate cuts and weigh on crypto asset valuations. The $70,000 level is both a psychological support threshold and a key test of whether the retreat from recent highs can stabilize.

Cointelegraph reported on March 20, 2026, that Bitcoin had fallen rapidly from a March 17 high near $76,000, briefly slipping below $70,000 amid a selloff in U.S. stocks. Technical analyst Aksel Kibar warned that a break below the lower boundary of a wedge pattern could send the price toward $52,500. The Kobeissi Letter said markets were pricing in a 50% chance of an interest-rate increase by year-end.