Bitcoin (BTC) experienced classic volatility ahead of the Wall Street open on Tuesday as a key measure of US inflation hit three-year highs.
Key points:
- CPI inflation in the US reached the highest annual level since 2023.
- Energy prices are fueling growth, and the US-Iran war continues to make its presence felt.
- Bitcoin traders hold support levels as the 200-day trend line comes in as resistance.
Bitcoin price on edge as CPI breaks multi-year records
Data from TradingView showed the price of BTC hovering around $81,000 as risk assets took fresh hits.
BTC/USD hourly chart. Source: Cointelegraph/TradingView
They came in the form of April’s US Consumer Price Index (CPI), which at 3.8% on an annual basis put inflation at its highest level since 2023.
“The energy index rose 3.8 percent in April, accounting for more than forty percent of the monthly increase for all items,” official news from the US Bureau of Labor Statistics (BLS).
Twelve-month energy gains were nearly 18%, continuing to show the impact of the US-Iran war and oil-supply squeeze on prices.
“In contrast, indexes for new vehicles, communications and medical care were among the main indexes that declined in April,” the statement added.
US CPI 12 months % change. Source: BLS
Reacting, trading source Kobeissi Letter noted that the prospect of the Federal Reserve moving to raise interest rates was “increasing”.
“We are now experiencing post-pandemic levels of inflation amid a surge in oil prices,” writes the post on X.
Fed rate target probabilities (screenshot). Source: CME Group
The latest data from the CME Group The FedWatch tool showed expectations based on current rates that will remain in place through 2026 and beyond.
Crypto and risk assets tend to fall when rate spikes return, thanks to the implied lower liquidity entering the market.
Questions about Bitcoin’s “momentum” on the 200-day trend line
Bitcoin traders, meanwhile, reiterated the lines in the sand that bulls should protect in the short term.
Related: BTC price target becomes $85k in coming days: Five things to know in Bitcoin this week
“The 21-MA is a key level to watch,” crypto trader and analyst Michaël van de Poppe told X followers per day, referring to the 21-day simple moving average (SMA) of $78,800.
“The $76k area is a key support zone that I don’t think should be broken, if that happens we will go significantly lower.”
BTC/USDT one day chart. Source: Michaël van de Poppe/X
Material trading source indicators have flagged problematic resistance in the form of the 200-day SMA near $82,600.
“Bulls appear to be trying to establish an R/S Flip at $80.7K to build fundamental support for another break of the 200-day SMA,” it said. summarize.
“Do the bulls have the momentum to succeed?”
BTC/USD one day chart. Source: Material indicators/X
