Why Is Bitcoin Struggling Despite Cooling US Inflation?

Bitcoin is back near $64,000 on August 13 even after the latest U.S. inflation report reduced some of the pressure on the Federal Reserve to raise rates. July CPI rose just 0.1% from June, while annual inflation eased to 3.4%. The result was supportive for risk assets, but Bitcoin failed to extend the rebound that followed last week's weak jobs report. BTC has instead slipped below the $64,300 support from our previous setup, putting the lower end of its recent structure back in focus.

Key Takeaways

• U.S. consumer prices rose 0.1% in July, while annual inflation eased from 3.5% to 3.4%.
• Core inflation fell to 2.5% annually, reducing expectations for a September Fed rate hike.
• Bitcoin failed to extend its post-jobs-report recovery and has slipped back below the $64,300 level.
• BTC now needs to defend $63,200, while a deeper break would bring $62,500 back into focus.

July CPI Cools as Rate Hike Expectations Ease

The July inflation report gave markets another reason to expect the Federal Reserve to remain patient. Reuters reported that headline CPI rose 0.1% during the month, in line with forecasts, while annual inflation eased from 3.5% to 3.4%. Core CPI increased 0.2% monthly and slowed to 2.5% over the year.

That followed last week's weak employment report, when U.S. payrolls unexpectedly fell by 23,000 in July.

Together, the two releases have reduced the immediate case for another rate increase. Money markets cut the probability of a September hike to around 40% after the CPI release, down from 54% a week earlier. Bitcoin has not made much use of that shift so far.

Bitcoin Gives Back Its Post-Jobs Report Recovery

When we last covered Bitcoin on August 10, BTC was trading near $65,000 after the weak jobs report improved expectations that the Fed could remain on hold.

The recovery still needed confirmation. Bitcoin had to clear $66,000 before the move could challenge the July swing high, while $64,300 was the support keeping the short-term recovery intact.

Neither side of that setup developed in buyers' favor.

Bitcoin reached the mid-$65,000s but failed to push through the resistance above. CoinGecko currently shows BTC around $64,000 after trading between roughly $63,800 and $65,400 over the latest 24-hour period.

The important change is that the recovery no longer has $64,300 underneath it. Price has slipped through that level instead of using the cooling inflation report to make another attempt at $66,000.

That does not confirm a larger breakdown on its own, but it puts buyers back on defense.

PPI Is the Next Inflation Test

Markets will get another inflation reading on August 13 when the Bureau of Labor Statistics releases July producer prices.

The BLS release calendar has the Producer Price Index scheduled for 8:30 a.m. ET. Economists surveyed by Reuters expect annual producer inflation to ease to 4.9% from 5.5% in June.

PPI matters because yesterday's CPI report already removed some pressure for an immediate Fed hike. Another softer inflation reading could reinforce that shift, while a stronger number would complicate the picture.

Bitcoin's reaction may be more important than the headline number itself. BTC already received weaker employment data and cooler consumer inflation without breaking its major resistance. A favorable PPI print would give buyers another opportunity to change that.

Bitcoin Technical Analysis on the 4-Hour Chart

Bitcoin's 4-hour structure has weakened since the August 10 recovery attempt.

The first important change is the loss of $64,300. This level supported the previous rebound and kept BTC within reach of the $66,000 resistance. With price now below it, $64,300 has shifted into the first recovery test.

A completed 4-hour close back above $64,300 would reduce the immediate downside pressure, but it would not restore full buyer control. Bitcoin still needs to clear $66,000, where the latest recovery repeatedly failed to develop into a larger breakout.

The downside now starts around $63,200. Bitcoin has repeatedly found buyers around the low-$63,000s during the latest pullbacks, and the current seven-day low sits close to this area. Holding $63,200 would leave BTC inside its broader July and August consolidation despite the loss of $64,300.

A completed 4-hour close below $63,200 would make $62,500 the more important test.

That level carries more weight because it was already the structural invalidation in our August 10 setup. Losing $62,500 now would confirm that the recovery triggered by the weak jobs report has fully failed and return Bitcoin to the lower part of its broader range.

The immediate structure therefore favors sellers while BTC remains below $64,300. Buyers can stabilize the chart by reclaiming that level, but $66,000 remains the stronger threshold for regaining control. On the downside, $63,200 is the first defense before the more important $62,500 test.

What to Expect Next

• Bullish case: Bitcoin reclaims $64,300 and builds another move toward $66,000.
• Bearish case: A completed 4-hour close below $63,200 exposes the $62,500 structural support.
• Key catalyst: July PPI will provide the next test of whether easing inflation pressure can improve risk appetite.
• Invalidation: A completed 4-hour close above $66,000 would invalidate the immediate bearish structure.

FAQs

Why did Bitcoin fall despite cooler inflation?

The CPI report reduced expectations for a near-term Fed rate hike, but Bitcoin still failed to clear its existing technical resistance. Softer inflation does not automatically create Bitcoin demand.

What is the key Bitcoin support now?

$63,200 is the immediate support. A completed 4-hour close below it would bring the more important $62,500 level back into focus.

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