The U.S. Bureau of Labor Statistics released July's Consumer Price Index (CPI) data on August 12, 2025, showing headline year-over-year inflation unchanged at 2.7% – below Wall Street expectations of 2.8%. Core CPI (excluding food and energy) rose to 3.1% year-over-year, exceeding forecasts of 3.0% and June's 2.9% reading. Monthly CPI came in at 0.2%, down from 0.3% in June.
Immediately following the release, Bitcoin rebounded above $119,200 after trading as low as $118,159, though trading volume dropped 13% indicating muted activity. Ethereum surged 5% to $4,401 with a 24% volume spike. The CME FedWatch Tool now prices a 93% probability of a 25-basis-point Fed rate cut in September, up from 84% pre-release.
Despite the rally, analysts warned of persistent headwinds: Bitcoin's double-top bearish reversal pattern near $122,600, seasonal weakness, and slowing ETF inflows. Matrixport identified $116,817 as critical BTC support, while noting altcoins could benefit from shifting investor focus. Bond yields fell to 4.265% and the dollar index (DXY) dipped to 98.40 post-release.