Bitcoin ($BTC) to Dip Below $60K Amid Hotter US CPI Data

10月10日

Bitcoin’s price could soon slip below the $60,000 mark following the latest U.S. Consumer Price Index (CPI) data, which showed inflation at 2.4% for September, slightly higher than market expectations of 2.3%. The hotter-than-anticipated inflation report has sparked concerns among investors, weighing on the broader crypto market and pushing Bitcoin (BTC) into a bearish outlook. Combined with growing macroeconomic uncertainties, including Federal Reserve rate decisions and geopolitical tensions, Bitcoin could face further downside pressure.

Impact of US CPI Data
The latest inflation data revealed that the US CPI held steady at 0.2% on a monthly basis, while annual inflation cooled to 2.4%, down from the 2.5% recorded in August. Despite this cooling, the figure surpassed market expectations, triggering concern among investors who now anticipate a more hawkish stance from the Federal Reserve. With inflation running higher than anticipated, fears of tighter monetary policy have intensified, particularly as the Fed is widely expected to implement a smaller 25 basis point (bps) rate cut in November, down from an earlier prediction of 50 bps.

These developments are contributing to widespread risk aversion in the market, with investors turning cautious ahead of the Fed’s next move. A more restrictive monetary policy could reduce liquidity in the market, further pressuring risk assets like Bitcoin.

Adding to this, the release of gloomy U.S. job data and the rising US 10-year bond yield, which hit 4.073%, have intensified negative sentiment. The crypto market has not been immune, with Bitcoin down 1.3% following the CPI data release. BTC briefly crossed below the 61K mark, touching a low of $60,314, and is currently trading at $60,449 as of this writing.

Macro Factors at Play: Global Concerns Weigh on Sentiment
Bitcoin’s downward trajectory is not just a result of inflationary pressures but also a broader set of macroeconomic uncertainties that continue to weigh on sentiment. Several key factors are contributing to this cautious outlook:

1. Geopolitical Tensions: Ongoing tensions in the Middle East are creating volatility in global financial markets, which in turn is impacting the crypto market. Any escalation could lead to further risk aversion, potentially dragging Bitcoin lower.

2. US Presidential Election: With the upcoming 2024 presidential election in the United States between Kamala Harris and Donald Trump, markets are bracing for increased political volatility. The uncertainty surrounding the election outcome could add another layer of risk for investors, keeping Bitcoin under pressure.

3. Federal Reserve’s Stance: As inflationary concerns remain, the market is now pricing in an 84% probability of a 25 bps rate cut by the Fed in November. Any hawkish surprises from the Fed could exacerbate the already fragile market sentiment, potentially leading to further selloffs in Bitcoin.

Technical Outlook
On the technical front, Bitcoin (BTC) is showing signs of weakness following the CPI data release. The daily chart reveals that Bitcoin is trading within a falling wedge pattern, a bearish formation that could signal further downside unless there is a breakout to the upside.

Key Technical Indicators:
The Relative Strength Index (RSI) is currently in an anomalous zone, indicating that Bitcoin (BTC) may not yet be oversold, but downward pressure is mounting. Bitcoin is trading within a falling wedge, which often indicates further downside unless there is a strong breakout. A break below $60,000 could send Bitcoin (BTC) towards the ceiling of the trendline at $50,000 which will be very bad for BTC.

Immediate support lies at the $60,000 psychological level. If broken, the next key support level is the $50,000 mark, which coincides with the lower trendline of the falling wedge. On the upside, Bitcoin (BTC) would need to clear resistance around the $61,500 mark to attempt a reversal.

If negative news continues to dominate the macro landscape, such as additional inflationary pressures, escalating geopolitical tensions, or unexpected hawkish moves from the Fed, Bitcoin (BTC) could see a sharper decline, possibly dipping toward the $50,000 level.

On the flip side, favorable developments like easing inflation, de-escalation in global conflicts, or a more dovish stance from the Fed could provide Bitcoin (BTC) with the momentum needed to break out of the falling wedge and move higher. If Bitcoin manages to clear $61,500, it could attempt a surge back toward the $65,000 resistance level.