Bitcoin is holding near $78,000 ahead of Friday’s August CPI release, with traders focused on whether the cryptocurrency can reclaim the $80,000 level. A move above that threshold could open the door to $82,000-$83,000, while renewed selling pressure could send BTC toward $76,000.

The inflation report is expected to have a major influence on expectations for the Federal Reserve’s next policy move. Futures markets currently place the odds of another rate hike at around 66%, although those expectations could change after the CPI figures are published. Treasury yields and the U.S. dollar will also remain important factors for Bitcoin and broader risk assets.

Economists expect headline CPI to increase 0.4% month over month and 3.4% year over year in August. Core CPI is projected to rise 0.2% from July and 2.4% annually. Meanwhile, energy prices have become a growing concern, with oil trading above $110 per barrel and Treasury yields moving close to 5%.

Brent crude has recently pushed above $111 per barrel, marking its highest level since May. The benchmark has risen nearly 83% since the start of the year, climbing from $60.70 on January 1 to around $111. The sharp increase of approximately $50 per barrel in just over eight months has renewed concerns that higher energy costs could keep inflation elevated.

Recent wholesale inflation data has reinforced those concerns. The producer price index increased 0.4% in August from the previous month, while headline PPI climbed 5.4% compared with a year earlier. The annual increase was 3.4 percentage points higher than the Federal Reserve’s 2% inflation goal.

Final-demand energy prices jumped 4.2%, while goods prices increased 1.1% and services prices rose 0.1%. The PPI report came shortly before the CPI release and the Fed’s upcoming policy meeting.

The stronger producer-price figures prompted traders to modestly raise their expectations for another rate increase, with CME Group’s FedWatch pricing showing the probability near 66%.

CPI Could Determine Bitcoin’s Next Direction

Bitcoin’s next major move could depend on whether the CPI report reinforces or eases concerns about inflation.

A cooler-than-expected reading could push Treasury yields and the dollar lower, potentially improving conditions for risk assets. In that scenario, Bitcoin could regain $80,000 and make another attempt at the $82,000-$83,000 zone. Lower yields could also benefit rate-sensitive equities such as those tracked by the QQQ and SPY benchmarks.

A hotter inflation reading would create a different setup. If core CPI reaches 0.4% or higher, markets could increase expectations for a September Fed rate hike. Higher yields and a stronger dollar could weigh on Bitcoin, making the $76,000 level an important downside target.

Bitcoin therefore enters the CPI release with a clearly defined range. A softer inflation reading could support a break above $80,000, while stronger-than-expected inflation could increase the risk of a retreat toward $76,000. The CPI report, followed by the Fed’s policy decision, will likely provide the clearest signals for BTC’s near-term direction.