Bitcoin bulls are once again eyeing the Fibonacci golden ratio, pushing prices above $122,000 as traders keenly await U.S. inflation data. This marks a renewed effort to conquer a crucial resistance level that has been a focal point for the market since the 2018 and 2022 bear market lows.
The Fibonacci Challenge
Bitcoin’s recent price surge to $122,056 underscores a fresh attempt by bulls to surpass the 1.618% Fibonacci extension. This mathematical constant, often observed in nature and art, has a profound influence on market psychology and movements. Last month, Bitcoin briefly broke this level but couldn’t maintain its ascent, leading to a pullback below $112,000. Success this time around could propel Bitcoin toward the $140,000 mark—a target heavily favored on crypto derivatives exchange Deribit, where the $140,000 call option holds a notional open interest exceeding $3 billion. For more on potential price movements, see our analysis in Bitcoin Price Crash To $100,000 Or Rally To $122,000?.
However, failure to hold above the golden ratio might signal insufficient buying pressure, potentially sparking a deeper correction. As of now, Bitcoin is trading at $122,000, having reached a high of $122,171 during early Asian trading hours, according to CoinDesk.
Inflation Data and Market Dynamics
All eyes are on the U.S. inflation report, scheduled for release on Tuesday. Analysts expect the core consumer price index to have risen by 0.3% in July, up from June’s 0.2%. The anticipation is that the residual effects of tariffs from the Trump era may have nudged inflation upward, putting additional pressure on prices.
Marc Chandler, chief market strategist at Bannockburn Global Forex, suggests that a higher-than-expected inflation reading could stir market volatility but is unlikely to prevent the Federal Reserve from cutting rates come September. “With U.S. interest rates still at the lower end of their ranges, despite a soft reception at the U.S. refunding last week, we suspect the market is vulnerable to what may prove to be the third consecutive monthly increase in the year-over-year headline and core CPI,” Chandler noted. He added that the dollar’s downtrend could persist post-report, potentially benefiting risk assets, including cryptocurrencies. This aligns with concerns highlighted in Bitcoin’s Long-Term Bullishness Evaporates From Options Market as Inflation Concern Rises.
Historical Context and Future Implications
Historically, Bitcoin’s price movements have been sensitive to macroeconomic indicators such as inflation and interest rates. The impending inflation data not only holds implications for the dollar but also for Bitcoin and other risk assets. A continued dollar downtrend could enhance Bitcoin’s appeal as a hedge against inflation, drawing in more institutional and retail investors alike.
Yet, the market remains cautious. Last month’s failed attempt to hold above the Fibonacci level serves as a stark reminder of the volatility inherent in cryptocurrency markets. This time, the stakes are higher. A successful breach could validate bullish sentiments and fuel a further rally, while another failure might reinforce bearish narratives, ushering in a period of correction and consolidation.
In the coming days, investors will closely monitor how Bitcoin reacts not just to the Fibonacci level but also to the broader economic signals emanating from the U.S. inflation data. The interplay of these factors will likely chart Bitcoin’s course, raising questions about whether this upward momentum can be sustained or if another retracement is on the horizon. As ever in the crypto world, uncertainty and opportunity walk hand in hand, leaving traders and analysts on their toes.
Source
This article is based on: Bitcoin Bulls Take Another Shot at the Fibonacci Golden Ratio Above $122K as Inflation Data Looms
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
