Key Insights:
- Michaël van de Poppe highlights Bitcoin’s key resistance as traders await CPI data.
- Market sentiment remains neutral as traditional assets show little reaction to trends.
- Analysts see CPI as a key trigger for Bitcoin’s next move amid macroeconomic uncertainty.
Bitcoin price is hovering above $96,000 today, and the U.S. Labor Department is set to release January’s consumer price index (CPI) report at 13:30 UTC. Market participants anticipate limited progress in curbing inflation, with analysts closely watching its impact on Bitcoin price and other risk assets.
The crypto market has seen muted movement ahead of the report, with Bitcoin price trading lower by 1.8% today. Traders remain cautious as forward-looking inflation indicators suggest a restricted upside. Meanwhile, institutional players continue to monitor liquidity conditions and macroeconomic trends influencing digital asset performance.
Bitcoin Price Consolidates Within Key Levels
Bitcoin price action has remained range-bound, with a notable consolidation. Market analysts have identified crucial support and resistance levels that could determine near-term movement.
Michaël van de Poppe, CIO and Founder of MN Consultancy, has highlighted a key support zone between $91,552 and $95,982, where Bitcoin has previously bounced. This area signals strong buying interest, making it a focal point for traders assessing potential long positions.
Resistance remains at $104,087, a level where sellers have repeatedly rejected upward price movements. The analyst considers this a crucial hurdle for the Bitcoin price to break in order to sustain any bullish momentum.
Macro Trends and Market Sentiment
Market sentiment across traditional finance remains neutral, with equities and bonds showing little reaction to recent economic events. According to QCP’s latest analysis, traditional markets have struggled to establish a clear direction despite ongoing tariff actions involving the U.S., Canada, Mexico, and China. The firm notes that credit yields remain near cycle lows, and credit spreads between investment-grade and junk bonds have not widened.
The VIX volatility index remains anchored at 16, indicating that market participants have already positioned themselves for potential downside risks. Meanwhile, Federal Reserve Chair Jerome Powell reiterated a “wait-and-see” stance on interest rate cuts during his Senate testimony. Despite a hawkish tone, the U.S. Dollar Index (DXY) failed to rally, reflecting market expectations that the dollar may face downside risk.
QCP referenced Commodity Futures Trading Commission (CFTC) data, suggesting that traders hold significant long positions on the dollar, leading analysts to speculate on potential unwinding. With interest rate differentials indicating an overvalued dollar, analysts view tonight’s CPI release as a possible trigger for a decline in the DXY. Any downward movement in the dollar could support risk assets, including Bitcoin price, though the cryptocurrency has lagged behind equities and gold in recent weeks.
Inflation Expectations and Bitcoin Price Outlook
Market forecasts for January’s CPI inflation rate suggest expectations of around 2.9%. Major financial institutions have provided their projections, with Bank of America and Moody’s estimating 2.8%. Barclays, BNP Paribas, Morgan Stanley, and Wells Fargo expect 2.9%, while Citigroup, Goldman Sachs, and UBS project 3.0%.
Meanwhile, Kalshi’s prediction markets, which have accurately forecasted six of the last seven CPI releases, also predict 2.9%. A reading above this level would mark the fourth consecutive month of increasing inflation.
Notably, the Bitcoin price has recently underperformed compared to equities and gold, suggesting caution among traders. Liquidity conditions in crypto markets remain thin amid a surge of new listings, and last week’s large-scale liquidations have left many participants sidelined. Institutional investors continue to assess risk, with some opting for downside protection through put options, which remain relatively inexpensive at present.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of monetary loss.
