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Key takeaways:

July US CPI held steady at 2.7% year-over-year, boosting Fed rate cut bets to 93.9% for September.

Key price support lies between $117,650 to $115,650, with a deeper drop potentially testing a CME gap at $95,000.

Bitcoin (BTC) price could continue to rally after the release of the July US Consumer Price Index (CPI), which shows inflation holding at 2.7% year-over-year, unchanged from June and below the 2.8% forecast. Core CPI, excluding food and energy, rose 3.1% annually, in line with expectations. On a monthly basis, overall CPI increased 0.2%, easing from 0.3% in June, while core CPI rose 0.3% versus a 0.2% gain previously.

The data reinforces a mildly bullish backdrop for Bitcoin, as cooling inflation strengthens the case for monetary easing, a positive factor for risk-on assets. A lower interest rate environment reduces the opportunity cost of holding Bitcoin, potentially drawing fresh capital into the market. 

US interest rate cut possibility for Sept. 17. Source: CME FedWatch

Following the CPI data release, market expectations for a September Fed rate cut surged to 93.9%, according to CME FedWatch, as traders priced in a higher likelihood of monetary easing.

However, the in-line core CPI figure suggests that underlying price pressures persist, indicating the Fed may still require more evidence before taking action. 

Looking ahead, next week’s Producer Price Index (PPI, 2.3% estimated) and Core PPI (2.5% estimated) could be key. A softer-than-expected print could confirm a bullish macro setup for Bitcoin, reinforcing lower rate expectations and boosting demand for risk assets like Bitcoin. 

Related: Bitcoin gets $95K target as ‘ugly’ BTC price candle spoils breakout

Bitcoin to hit $130,000 in September?

Following a bullish weekend, Bitcoin surged to Monday highs of $122,190, but gains were short-lived as the price quickly dipped 3% to $118,500, failing to secure a daily close above the $120,000 mark.

Post US CPI release, BTC rebounds to $119,500, though a decisive close above $119,982 remains key to confirming immediate upside momentum. A daily close above $120,000 would be a historic first, potentially igniting the next leg of Bitcoin’s rally.

Bitcoin one-day analysis. Source: Cointelegraph/TradingView

On the technical front, a bullish flag pattern on the daily chart recently broke to the upside. The current pullback could be a retest before continuation toward the primary target of $130,000.

Notably, technical analyst Titan of Crypto projects a similar bullish scenario, eyeing $137,000 based on a descending trendline breakout seen on Sunday.

However, failure to reclaim $120,000 could invite short-term downside pressure. Immediate support lies in the $117,650–$115,650 zone. This key support area also coincides with the CME gap formed over the weekend, making it a key zone for traders to watch.

As noted by Cointelegraph, despite holding higher ground, BTC is not entirely immune to losing the critical $100,000 support, with a deeper correction could test levels as low as $95,000.

Bitcoin four-hour analysis. Source: Cointelegraph/TradingView

Related: Bitcoin will make history at $340K if BTC beats last cycle’s 2,100% gains

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.

Key takeaways:

Bitcoin’s percent supply on exchanges has dropped below 15% for the first time since 2018.

Depleting exchange supply and OTC balances, pointing to “supply shock” and long-term accumulation.

BTC price must remain above $100,000 to secure the upside.

Bitcoin exchange reserves have fallen below 15%, suggesting a supply shock as institutional demand from exchange-traded funds (ETFs) grows.

Percentage of BTC on exchanges drops to seven-year lows 

Bitcoin (BTC) percent supply on exchanges has dropped to near seven-year lows, falling to 14.5% for the first time since August 2018, Glassnode data shows.

BTC percent balance on exchanges. Source: Glassnode

Diminishing Bitcoin supply on exchanges may signal an incoming price rally fueled by a “supply shock,” which occurs when strong buyer demand meets decreasing available BTC.

Related: Bitcoin hashrate down 15%, 26 firms add BTC to balance sheets: June in charts

This trend usually signals rising investor confidence and a shift toward long-term holding. For example, BTC is typically transferred to cold storage or self-custody wallets, reducing the liquid supply available for trading. 

Whales often withdraw BTC after buying, signalling ongoing accumulation. With fewer coins available for sale, short-term sell pressure diminishes.

Over-the-counter Bitcoin balances hit all-time lows

Over-the-counter (OTC) desks, which facilitate large, private cryptocurrency trades, are also experiencing a tightening supply. These desks typically match buyers and sellers but depend on maintaining BTC reserves for swift and reliable trade execution.

The cumulative balance of BTC held in known OTC addresses is at historic lows. CryptoQuant data shows a 21% decline in OTC address balances linked to miners since January, now down to an all-time low of 155,472 BTC.

This figure reflects inflows from over two unique “1-hop” addresses tied to mining pools, excluding miners and centralized exchange addresses. This data aggregates inflows from over two distinct “1-hop” addresses connected to mining pools, excluding miners themselves and centralized exchange addresses.

BTC: OTC address balance. Source: Glassnode

This increasing scarcity on exchanges and OTC desks can amplify price surges as demand outstrips supply.

“The Bitcoin balance available OTC is in freefall,” Crypto Chiefs said in a recent X post, adding:

“We have never seen such a divergence between balance and price! You are witnessing a supply problem play out.”

Bitcoin is resilient on “strong institutional demand”

Bitcoin remained strong above the key $100,000 psychological support, a level it has held since May 28, despite seeing 2.85% losses over the last two days. 

Bitcoin’s resilience above the $100,000 mark is backed by “strong institutional demand” and “shrinking,” according to Focusw3b Agency founder, Lau.

This demand is most evident in spot Bitcoin ETF inflows, which have recorded 15 days of consecutive inflows. 

According to data from SoSoValue, the streak began on June 9, with inflows of over $386 million and continued through Monday, with an additional $102 million in inflows. In total, over $4.7 billion in capital moved into spot Bitcoin ETFs over the past 15 days.

Bitcoin ETF inflow data from June 6 to June 10. Source: SoSoValue

Maintaining the $100,000 psychological support will be critical for securing Bitcoin’s upside and avoiding significant downside volatility.

A potential Bitcoin correction below $100,000 would liquidate over $6.42 billion worth of cumulative leveraged long positions across all exchanges, CoinGlass data shows.

Bitcoin exchange liquidation map. Source: CoinGlass

Numerous analysts say that Bitcoin dropping below $100,000 is becoming less likely, setting optimistic targets for the rest of 2025 ranging from $140,000 to above $200,000.

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.