Bitcoin Briefly Surged as White House Delays China Tariffs – Next Move Hinges on Inflation Data

A last-minute policy shift from Washington jolted Bitcoin prices on Monday, with traders reacting to President Donald Trump’s decision to delay tariffs on Chinese imports for another three months.

The move, aimed at easing trade tensions ahead of the August 12 deadline, initially sparked a rush of buying across crypto markets.

BTC’s rally was swift, hitting $119,800 before momentum cooled. Sellers quickly regained control, knocking the price back to the $119,000 area – a level that also sits above an unfilled CME futures gap, a technical zone traders expect could be tested before any sustained push higher.

Why This Matters for the Next Rally

While tariff headlines triggered the knee-jerk reaction, the bigger driver for Bitcoin over the coming days may be U.S. inflation data. The Consumer Price Index (CPI) lands on August 12, followed by Producer Price Index (PPI) figures a day later. Should the reports point to cooling inflation, the odds of a September Federal Reserve rate cut – already priced at over 86% – could rise further, potentially setting a more favorable backdrop for risk assets.

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Two Diverging Paths for BTC

Market strategist Altcoin Sherpa outlined two possible outcomes from here:

• Extended consolidation: Bitcoin could retreat to build a higher time frame base, a process that might take weeks but could lay the groundwork for a stronger rally later.
• Quick liquidity test: Prices could rebound toward the $120,000 zone in the near term, especially if macro events or treasury flows add fuel.

For now, Bitcoin’s short-term fate appears tied less to trade war politics and more to whether inflation numbers confirm a softer economic environment – a condition that could reignite the rally toward its $123,000 record high.

At the time of writing BTC has retraced back below $119,000.