Bitcoin is trading around $63,600 on Wednesday, remaining below the $64,000 mark as cautious sentiment prevails across the cryptocurrency market. The broader risk-off mood, coupled with anticipation of the upcoming US inflation report, has kept buyers on the sidelines.
Investor sentiment, as measured by CoinMarketCap's Fear and Greed Index, stands at 37, placing the market in the "fear" zone. This reading suggests that traders are hesitant to increase exposure to volatile assets, reflecting a lack of confidence in the near-term outlook.
CPI data could dictate next move
The market's focus is squarely on the Consumer Price Index (CPI) release later today. Analysts expect headline inflation to ease to 3.4% year-over-year, while core inflation is forecast to decline to 2.5%. A softer-than-expected reading could reinforce the disinflation narrative that emerged from last week's disappointing US payrolls report, which saw the probability of a September rate hike drop to around 44% from roughly 80% in late July.
If inflation comes in cooler than anticipated, it could weaken expectations for further monetary tightening and provide support for risk assets like Bitcoin. Conversely, a hotter reading could revive interest-rate concerns and pressure cryptocurrency prices.
Technical levels to watch
Bitcoin's near-term outlook remains bearish as it trades below several key exponential moving averages (EMAs). The 50-day EMA at $64,583 is the first significant resistance level, followed by the 100-day EMA at $66,736 and the 200-day EMA at $72,190. With all three averages above the current price, sellers maintain a technical advantage.
On the downside, Bitcoin is hovering just above a short-term ascending support trendline near $63,676. This level has contained the latest decline and is critical to the immediate outlook. A decisive daily close below this trendline could confirm a bearish breakdown, potentially leading to a drop toward the July 6 low of $61,307. If that level fails, the correction could deepen.
Conversely, a rebound from the $63,676 support could allow Bitcoin to retest the 50-day EMA at $64,583. A daily close above this average might reduce selling pressure and open the path toward a descending resistance trendline around $65,312, which has capped several recent recovery attempts. Clearing that level could attract sidelined buyers and pave the way toward the 100-day EMA at $66,736.
Momentum indicators show limited buying pressure
Momentum indicators suggest that buying pressure remains weak. The Relative Strength Index (RSI) is hovering near 48, below its neutral midpoint of 50, indicating that bears hold a modest advantage. The Moving Average Convergence Divergence (MACD) has also slipped marginally below its signal line, signaling weakening bullish momentum.
Further declines in these indicators could strengthen the bearish outlook, while an RSI recovery above 50 and a bullish MACD crossover would indicate improving demand. For now, the market remains in a wait-and-see mode as traders digest the CPI data and its implications for monetary policy.
As the broader equity markets also react to inflation concerns, as seen in recent Dow moves, Bitcoin's trajectory may align with risk sentiment. The outcome of the CPI report could be the catalyst that determines whether Bitcoin breaks toward $70,000 or extends its decline.
This article is for informational purposes only and does not constitute financial advice.
