Bitcoin eyes $137K as cooling US inflation lifts Fed rate cut hopes

Bitcoin (CRYPTO:BTC) bulls have raised their target price to $137,000 after US inflation data increased the probability of a Federal Reserve rate cut to 94%.

July’s US Consumer Price Index (CPI) held steady at 2.7% year-on-year, below the 2.8% forecast, while core CPI rose 3.1% annually, meeting expectations.

Monthly CPI growth slowed to 0.2% from June’s 0.3%, while core CPI increased 0.3% compared to the previous 0.2% gain.

The softer inflation data supports the case for monetary easing, which could encourage further investment in Bitcoin and other risk assets.

However, the stable core CPI suggests underlying price pressures remain, meaning the Fed may await further data before cutting rates.

Bitcoin briefly hit $122,190 on Monday before retreating to $118,500, failing to close above $120,000.

Following the CPI release, BTC recovered to $119,500, with traders watching for a decisive close above $119,982 to confirm bullish momentum.

A close above $120,000 would be a historic first and could fuel a push toward the next target of $130,000.

Next week’s Producer Price Index data, forecast at 2.3% for PPI and 2.5% for core PPI, could further shape market sentiment.

Technically, a bullish flag breakout on the daily chart points toward $130,000, with analyst Titan of Crypto projecting $137,000 after a descending trendline breakout.

Failure to reclaim $120,000 may trigger short-term declines, with key support between $117,650 and $115,650.

This support zone also matches a CME gap from the weekend, making it crucial for traders to monitor.

Analysts caution that despite current strength, Bitcoin remains vulnerable to a drop toward $100,000 or even $95,000 in a deeper correction.

At the time of reporting, Bitcoin price was $120,126.