BTC and a Run at $29,000 in the Hands of the US CPI Report

Key Insights:

• On Tuesday, BTC extended its losing streak to four sessions, falling by 0.12% to end the day at $27,668.
• Market angst toward US inflation weighed on investor appetite for riskier assets.
• The technical indicators were bearish, signaling a return to sub-$27,000.

On Tuesday, bitcoin (BTC) slipped by 0.12%. Following a 2.75% loss on Monday, BTC ended the day at $27,668. Significantly, BTC extended its losing streak to four sessions and failed to revisit the $28,000 handle for the first time since April 23.

After a range-bound morning, BTC rose to an early afternoon high of $27,846. Falling short of the First Major Resistance Level (R1) at $28,488, BTC fell to a late afternoon low of $27,383. However, steering clear of the First Major Support Level (S1) at $27,111, BTC revisited the $27,800 handle before falling back into negative territory.

US CPI Report Angst Left BTC in Negative Territory

It was a quiet Tuesday session. There were no US economic indicators for investors to consider in the afternoon. The lack of economic indicators left BTC in the hands of Fed chatter and market sentiment toward US inflation and the Fed.

With inflation in focus, FOMC member commentary influenced. On Tuesday, FOMC Vice Chair John Williams shared his views on the economic outlook and monetary policy, saying,

“First of all, we haven’t said we’re done raising rates. We’re going to make sure we’re going to achieve our goals, and we’re going to assess what’s happening in our economy and make the decision based on that data.”

Williams also said he did not have an interest rate cut in his baseline forecast and could hike rates if required.

There were no crypto events to distract investors, leaving BTC on the back foot alongside the NASDAQ Composite Index.

On Tuesday, the NASDAQ Composite Index fell by 0.63%, with the Dow and S&P 500 seeing losses of 0.17% and 0.46%, respectively.

The Day Ahead

It is a busy day ahead for the global financial markets. The all-important US CPI Report will be in focus this afternoon.

Hotter-than-expected inflation numbers would fuel bets of a 25-basis point June interest rate hike. Significantly, the markets would delay expectations of an interest rate cut and consider a hard landing. Economists forecast the US core annual inflation rate to soften from 5.6% to 5.5% and for the headline inflation rate to hold steady at 5.0%.

However, away from the US economic calendar, US lawmakers and regulatory activity will continue to move the dial. Investors should track SEC v Ripple case updates, with a Court ruling likely to have a material impact. Binance and Coinbase (COIN)-related news will also influence.

Bitcoin (BTC) Price Action

This morning, BTC was flat at $27,668. A range-bound start to the day saw BTC fall to an early low of $26,660 before steadying.

Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $27,632 pivot to target the First Major Resistance Level (R1) at $27,882. A move through the Tuesday high of $28,846 would signal an extended bullish session. The crypto news wires and the US CPI Report should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $28,095 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $28,558.

A fall through the pivot would bring the First Major Support Level (S1) at $27,419 into play. However, barring a US CPI Report-fueled sell-off, BTC should avoid sub-$27,000. The Second Major Support Level (S2) at $27,169 should limit the downside. The Third Major Support Level (S3) sits at $26,706.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. BTC sat below the 200-day EMA ($28,410). The 50-day EMA converged on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, sending bearish signals.

A bearish cross of the 50-day EMA through the 200-day EMA would support a fall through S1 ($27,419) to bring S2 ($27,169) into view. However, a move through R1 ($27,882) would give the bulls a run at R2 ($28,095) and the 200-day ($28,410) and 50-day ($28,425) EMAs. A BTC move through the 50-day EMA would send a bullish signal.