Bitcoin Tumbles After US CPI Data, Growth Concerns Mount

Bitcoin fell sharply on yesterday after the US Core CPI came in above forecasts. The small shifts in rate hike expectations and the dovish repricing at the long end of the curve indicate that the market may be turning more worried about the economic growth outlook.

Notably, equities, copper, digital assets, the greenback and bond yields are all declining on the day, whereas gold has recovered its entire losses. This pattern resembles a stagflationary scenario, where risk assets and the dollar tend to lag behind gold's performance.

Future catalysts include the Flash PMI releases, the Federal Open Market Committee meeting, US-Iran talks and the US midterm elections. Should economic indicators begin to signal worsening conditions, the market's growth concerns could intensify.

Such a development would be bearish for risk appetite and could add pressure on bitcoin and the broader cryptocurrency market. A full reversal of the outlook would require an end to the US-Iran conflict, which would instantly boost growth prospects.

BITCOIN TECHNICAL ANALYSIS – DAILY TIMEFRAME

Bitcoin has tested the support zone near the 80,000 level multiple times. Buyers are expected to keep entering around that support, risking below it, aiming for a rebound toward 98,000. Conversely, sellers are looking for a break below to add to short positions targeting a decline to 75,000.

BITCOIN TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the four-hour timeframe, resistance is seen near 84,000. A bounce from support could attract sellers at that resistance level, with risk above it, aiming for a breakdown below support. Buyers, meanwhile, seek a breakout above resistance to boost bullish positions targeting 87,400.

BITCOIN TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

The hourly chart shows that the price fell below the minor support at 83,000 yesterday following the US CPI data, extending losses as additional sellers entered, aiming for the 80,000 support. There is little additional analysis — buyers are expected to defend the 80,000 support in an attempt to reach new highs, while sellers aim for a break to push prices to new lows.

UPCOMING CATALYSTS

On today's agenda are the US Producer Price Index, Retail Sales and weekly Jobless Claims. Additionally, Fed Chair Warsh will speak late in the day in a fireside chat with IMF Managing Director Georgieva. Given his opposition to forward guidance, he is not expected to offer policy hints, but the event is worth monitoring.