Bitcoin Pulls Back as Inflation and Oil Risks Rise

Bitcoin has eased back to 64k as hopes for the reopening of the Strait of Hormuz fade, lifting oil prices and raising inflationary concerns ahead of tomorrow's CPI data, whilst also weighing on risk sentiment.

Bitcoin trades down 1.7% over the past 24 hours, pulling back from 65.5k on Monday.

Bitcoin, cryptocurrencies and other risk assets had been boosted by Friday's weaker-than-expected non-farm payroll report, which showed the first decline in payrolls since February.

Softness in the U.S. jobs market caused the market to rein in hawkish Fed rate hike expectations. However, inflation risks remain a key concern for the Fed amid ongoing volatility in oil prices due to uncertainty in the Middle East.

US CPI data due as oil volatility keeps inflation in focus

As a result, attention is now turning to July's inflation data. CPI figures will be released on Wednesday and PPI on Thursday, which could provide fresh clues over the outlook for interest rates.

The data comes as oil prices jumped almost 5% on Monday after Iran ruled out direct talks with the U.S. and warned that a full reopening of the Strait of Hormuz would only be possible if Washington met certain conditions. Concerns over oil flows have been further exacerbated by Iran-backed Houthi attacks on Saudi Arabian energy infrastructure, adding to supply concerns and safe-haven demand.

The U.S. dollar, which had fallen last week, has pushed higher this week, whilst U.S. equities closed lower on Monday and futures are pointing to a softer start.

Where Bitcoin, risk assets and the U.S. dollar go from here will depend heavily on the U.S. inflation data. Expectations are for headline CPI to ease to 3.4%, down from 3.5%, whilst core CPI is expected to ease to 2.5% from 2.6%.

The data will be important for September Fed expectations, as well as for Federal Reserve Chair Warsh's speech at the Jackson Hole symposium later this month.

A hotter-than-expected inflation report could see markets raise rate-hike expectations, putting pressure on Bitcoin and other risk assets while supporting the U.S. dollar.

On the other hand, cooler-than-expected inflation, combined with the weaker non-farm payroll report, could further reduce expectations for Fed tightening and help Bitcoin break above 65K.

Strategy sells more BTC

Strategy announced that it sold 1,690 Bitcoin worth $108.6 million between August 3 and August 9. The move comes after the company made its first Bitcoin sale since 2022 in June, marking a sharp departure from its previous accumulation strategy.

However, the market appears to be taking the latest sale much more in its stride compared with the initial sale, which triggered a sharp sell-off in BTC.

The more muted reaction could suggest that investors see the latest sale as a funding decision by Strategy rather than a sign that institutional demand for Bitcoin is turning lower.

Bitcoin technical analysis

Bitcoin has recovered from 57.7K, the 2026 low, but has run into resistance around the 50 EMA and the falling trendline dating back to October, around 65K. The price remains within a familiar range since mid-July, while the RSI is neutral, pointing to a lack of strong directional momentum.

Buyers will need to break above 65K to reclaim the 50 EMA and falling trendline, exposing the 100 EMA and 67K, the July high. A move above this zone would expose the 200 EMA at 72.4K. Above this level, the outlook becomes more constructive.

Immediate support is at 62.5K, which has limited the downside since mid-July. A break below this level would bring the psychological 60K level and the 2026 low at 57.7K into focus. Below here, attention turns to 55K and 50K, levels last seen in 2024.

Read more from PrimeXBT

Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website / T&Cs. Some products and services, including MT5, may not be available in your jurisdiction. The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.