Fed’s Bowman calls for decisive rate cuts to address job market fragility
- BTC eases back from 123k record high to 117k
- Several tailwinds & Q3 seasonality in post-having years support BTC
- Near term profit taking & whale activity hits BTC
- US CPI is expected to rise to 2.7% YoY from 2.4%
- BTC technical analysis
After surging to a record high above 123k yesterday, BTC is easing slightly to current levels around 117k amid profit taking and some signs of caution ahead of US inflation data today. The fall back in Bitcoin is pulling cryptocurrencies across the board lower, with Ethereum and Ripple pulling back from the key levels of $3k and $3.00 reached yesterday.
Bitcoin rallied to a record high yesterday, up almost 20% from its June low, as a series of tailwinds have aligned. These include record-breaking institutional demand, soaring corporate interest, improving regulatory clarity as Crypto Week kicks off, and amid rising worries over the fiscal outlook for the US and USD debasement.
These fundamentals, combined with strong seasonality in the Q3 period of post-having years, mean the medium-term outlook remains bullish, with 135k the next level for bulls ahead of 150k.
Near-Term Sell Pressure
Near-term BTC is coming under pressure amid profit-taking and increased whale activity on Binance. According to CryptoQuant, the Binance whale activity score, which tracks the behaviour of large Bitcoin holders on the world’s largest exchange, showed that whales deposited 1800 BTC onto Binance on Monday. Furthermore, the data showed that transactions exceeding $1 million accounted for over 35% of the total Bitcoin inflows to the exchange.
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The increase in sell-side pressure triggered a wave of liquidations in the crypto markets. According to Coinglass, total liquidations reached $475 million over the past 24 hours, with long positions taking the largest hit at $391 million.
US CPI Up Next
Attention is now turning to US CPI inflation data due to be released in the American session. Expectations are for inflation to rise to 2.7% YoY in June, up from 2.4% in May. Meanwhile, core inflation is expected to rise to 3%, up from 2.8%. The increase is partly owing to President Trump’s trade tariffs, which are starting to push the cost of goods higher.
Hotter-than-expected inflation could prompt the market to push back against Federal Reserve interest rate cuts, driving the US dollar and pressuring cryptocurrencies in the near term.
Bitcoin Technical Analysis
Bitcoin finally pushed above the 111.9k resistance, extending gains to a record high of 123.3k before easing back. The price is testing the 50% Fibonacci extension at 116.9k, from the April 7 low (74.5k) to the May 22 high (111.9k). The move lower has brought the RSI out of overbought territory. However, the shooting star candlestick shows there was little demand at the higher levels. A shooting star is considered a reversal pattern.
Sellers are testing support at 116.9k, the 50% Fib level, and below here, 111.9k and 110k come into play again. A break below 105k would be required to create a lower low and alter the chart’s structure.
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With uncharted waters above, a close above 121.3k, the 61.8% Fib extension level could see the price rally towards the 78.6% Fib level at 127.6k and on to 135k. Beyond here, attention will be firmly on the 150k psychological level.
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