Bitcoin Bulls Reclaim $122K as Traders Brace for U.S. Inflation Data

Bitcoin surged back toward a critical technical level on Monday, as market participants awaited key U.S. inflation data that could shape expectations around Federal Reserve policy.

The leading cryptocurrency climbed to $122,056, once again testing the 1.618 Fibonacci extension drawn from the lows of the 2018 and 2022 bear markets. Often referred to as the “golden ratio,” this level carries psychological and technical significance for many traders and analysts, representing a potential springboard for the next leg higher.

This marks Bitcoin’s second attempt to decisively break above the Fibonacci threshold. The last challenge, which occurred in July, was short-lived — a rejection followed, sending BTC down to sub-$112,000 levels.

A sustained breakout above the $122K golden ratio could pave the way for a move toward $140,000, a key options target. Deribit data shows over $3 billion in notional open interest tied to $140K call options, underlining its significance in the current market structure.

However, failure to hold above the level again may indicate fading momentum, potentially triggering a deeper retracement in the near term.

As of press time, BTC was trading around $122,000, after hitting an intraday high of $122,171 during early Asia hours, according to CoinDesk data.

Macro Focus: Core CPI in Spotlight

Investor attention now turns to the upcoming U.S. Consumer Price Index (CPI) report, expected to show a modest uptick in core inflation for July. Economists polled by Bloomberg anticipate a 0.3% month-over-month rise in the core CPI — up from 0.2% in June — reflecting the lingering effects of tariffs and broader price pressures.

Despite the expected increase, most analysts believe it won’t derail the Federal Reserve’s path toward a rate cut in September. That sentiment was echoed by Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, who sees room for the dollar’s decline to resume after the data release.

“Even if CPI comes in slightly hotter, the broader trend suggests the Fed remains on track for easing,” Chandler noted. “July’s weak jobs report was a game-changer — it marked the end of the dollar’s short-term recovery and boosted expectations for a cut.”

Chandler added that the market remains sensitive to inflation surprises, but structural factors and soft labor data continue to tilt sentiment toward looser monetary policy — a backdrop that generally favors risk assets like crypto.