Bitcoin Sets New High On Back Of Latest CPI Inflation Data

Bitcoin (BTC) price hit a new all-time high above $123,231 on Wednesday on Coinbase, following a similar performance from the S&P 500 which rallied to a record high of 6,457.

Bitcoin’s ascent to new highs comes one day after the July US CPI print showed inflation holding at 2.7% year-over-year, which was unchanged from June and below the forecast 2.8%. The data showed overall CPI increasing 0.2% versus a 0.3% increase in June.

Following the report’s release, the CME FedWatch tool showed the market odds of an interest rate cut at the Federal Reserve’s September meeting rising to 93.9%.

Long-time crypto investors say that Fed rate cuts and a shift away from quantitative tightening are historically beneficial to Bitcoin’s price action, and many also anticipate the implementation of US President Donald Trump’s economic agenda outlined in the One Big Beautiful Bill to lead to an increase in spending, inflation and risk seeking in financial markets. 

Inflows to the Bitcoin and Ether spot ETFs have also caught traders’ attention and added to the bullish sentiment present throughout the market. Farside Investors’ X account shows the BTC ETF netflows reaching $65.9 million, while the ETH instrument saw $523.9 million in share purchases on Tuesday.

On Tuesday, the ETH ETF saw its first $1 billion inflow, and while the Bitcoin ETF netflows have slowed, the instrument still saw $1.02 billion in inflows since Friday. The cumulative impact of ETH’s success is clearly boosting sentiment across Bitcoin and altcoin prices. 

Liquidation heatmap data from Hyblock shows Bitcoin pushing through a short liquidation cluster starting at $122,500, with room for further forced closure of positions extending to $124,000. Data from CoinGlass suggests that nearly $2 billion in short positions are at risk of liquidation if traders push BTC price through the $122,800 to $125,500 liquidity cluster. 

Related: Bitcoin bulls charge at all-time highs as trader says $126K ‘pivotal’

Bitcoin’s rally to new highs puts its market cap above $2.45 trillion, while the total crypto market cap currently stands at a record $4.15 trillion.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.