Bitcoin holds $63,500 as soft CPI fails to break bottom case

Bitcoin's failure to rally on softer-than-expected US inflation data has put the widely discussed "bottom" thesis under pressure.

Bitcoin slipped to $63,500 after softer-than-expected US CPI data failed to trigger a rally, raising questions about the widely discussed "bottom" thesis.

"The market is pricing a post-CPI swing of just 1.3%, which is nothing out of the ordinary," Markus Thielen, founder of 10x Research, said.

The July CPI print came in at 0.1% monthly and 3.4% annually, with core at 2.5%, per forecasts. Bitcoin's muted response to the macro tailwind suggests a weakening correlation with risk assets, as persistent ETF inflows are offset by selling from miners and corporate treasuries. Public miners alone added $1.78 billion of selling pressure, according to CoinDesk.

With BTC trading in a $62,000-$66,000 range for weeks and open interest below 750,000 BTC, the next key support sits at $62,000. A break below could trigger additional selling across the broader crypto market.

The July CPI report, released at 12:30 UTC on Aug. 13, showed headline inflation at 3.4% year-over-year, down from 3.5%, with core at 2.5%. A softer print typically weakens the dollar and supports risk assets, yet Bitcoin held near $63,500, down roughly 27% year-to-date. Ether traded at $1,895.98, up 0.33%, while total crypto market cap held at $2.19 trillion.

The muted response reflects a market where ETF inflows are being neutralized by sales from miners and corporate holders. Public miners added $1.78 billion of selling pressure, according to CoinDesk, while crypto trading volume has dropped to a three-year low. US spot BTC ETFs added $850 million last week, per CoinDesk data, yet the price stayed pinned.

Derivatives data shows traders are not expecting fireworks. Bitcoin's 30-day implied volatility index receded to 37.5%, and 7-day ATM implied volatility compressed to 29.1v on BTC, per Laevitas. The $70,000 call remains the most actively traded contract on Deribit for a second consecutive day, while some participants are buying strangles to hedge for a sharp move in either direction.

The Fear and Greed index sits at 38. Open interest in BTC futures remains below 750,000 BTC, with the long-short ratio for takers flipping bearish, with shorts now accounting for 51.36% of activity. BlackRock lowered the minimum in-kind Bitcoin conversion for its iShares Bitcoin Trust from $25 million to $1 million on Aug. 10, a move that gives smaller holders direct ETF access without liquidating.

If the bottom thesis breaks, the next support sits at $62,000, with a potential slide toward $60,000. A hotter-than-expected inflation reading in coming months would strengthen bets on Fed rate increases, driving Treasury yields higher and creating further headwinds for risk assets. The September Federal Open Market Committee meeting, where rate policy will be decided, is the next macro milestone traders are watching.

This article is for informational purposes only and does not constitute investment advice.