The bitcoin price is hovering just below the $120,000 mark as traders brace for the release of the US Consumer Price Index (CPI) report. This inflation data, scheduled for later this week, could set the tone for the next major market move — either pushing BTC toward a breakout or triggering a sharp correction.
Historically, CPI announcements have sparked volatility across both traditional markets and cryptocurrencies, as they influence expectations for Federal Reserve policy.
Bitcoin Price Holds Gains Ahead of Data
The daily BTC/USD chart shows that Bitcoin has managed to recover from its late-July dip, consolidating in a tight range between $118K and $120K.
Source: Tradingview
This price action reflects market indecision. Traders are reluctant to commit to large positions before knowing whether inflation is cooling — which could be bullish for risk assets — or accelerating, which might reignite fears of tighter monetary policy.
On-Chain Metrics Show Growing Network Activity
Despite the cautious price action, on-chain data reveals a surge in new Bitcoin addresses.
Source: Glassnode
According to Glassnode, the number of new BTC addresses has spiked to levels not seen since late 2024, often a sign of rising retail participation. Historically, sharp increases in address creation have coincided with upcoming volatility, as new entrants either chase rallies or panic-sell during corrections.
Profit-Taking Signals Mixed Sentiment
Another important on-chain metric — Realized Profit by Age — shows a wave of profit-taking across various holder cohorts.
Source: Glassnode
Long-term holders (>10 years) have recently realized significant gains, while shorter-term holders also locked in profits during the recent push toward $120K. This mix of distribution from older wallets and profit-taking by recent buyers suggests a market at a potential turning point.
What to Watch After the CPI Release
If the CPI report shows cooling inflation, expectations for a more accommodative Fed could fuel a breakout above $120K, with $125K as the next resistance. However, a higher-than-expected CPI reading could strengthen the dollar and push bitcoin price back toward the $115K support zone.
Key levels to watch:
- Resistance: $120K and $125K
- Support: $115K and $110K
- On-chain trend in active addresses and profit-taking post-data release
Final Thoughts: A Market Poised for Action
The bitcoin price is in a holding pattern, but beneath the surface, network activity and profit-taking hint at growing tension. The CPI report could be the catalyst that determines whether Bitcoin breaks to new highs or faces a short-term correction.
Traders should prepare for rapid moves in the hours following the data release — with both opportunity and risk heightened in this critical macro moment.
