Bitcoin Hits New August Highs as Traders Weigh Inflation Data Impact

Bitcoin has started the week on a strong note, hitting new August highs as traders weigh the impact of crucial US inflation data. The Consumer Price Index (CPI) and Producer Price Index (PPI) numbers are due out this week, which will give markets a better idea of whether interest rates will rise or remain steady.

Recent US inflation cues have given mixed signals to Federal Reserve watchers, while the resolution of the US-Iran war remains uncertain. This has implications for CPI, particularly given oil's price sensitivity to events around the Strait of Hormuz shipping route. Crude oil prices are caught between opposing forces as markets assess the possibility of a breakthrough over the waterway.

The Japanese yen has also been in focus after its recent intervention by the US and Japan. The currency has weakened again, closing in on the key 160 level against the US dollar. Experts warn that the mechanism used to intervene will be unable to change the status quo on its own.

Bitcoin traders are eyeing a crucial level of $65,800 as bulls aim to break through and continue their upward momentum. Larger Bitcoin investors have been accumulating, with addresses holding more than 10,000 BTC showing a sharp shift towards accumulation. This has led to a significant increase in Bitcoin exposure involving larger investors.