Bitcoin (BTC) may head into next week’s US inflation report with less support than it had during the last two CPI releases, raising the risk of a pullback toward $70,000.
Key takeaways:
- Cleveland Federal Reserve nowcast projects April headline CPI to rise to 3.56% year over year.
- BTC’s rising wedge pattern could trigger a decline toward $70,000
Fed estimates 0.26% rise in headline inflation
The Cleveland Fed’s latest inflation nowcast estimates April CPI at 3.56% year over year, up from 3.3% in March.
Year-over-year inflation expectations for April and May. Source: Cleveland Fed
It expects monthly CPI at 0.45%, down from 0.9%, while core CPI is projected at 2.56% year over year and 0.21% month over month, compared with 2.6% and 0.2% previously. The official April CPI report is due on May 12.
That keeps the inflation picture mixed. Headline CPI is expected to reaccelerate, even if the monthly pace slows and core inflation stays mostly stable.
For risk assets, that is not an ideal setup. A firmer annual CPI reading can still reinforce the view that the Fed has little room to cut rates quickly, which tends to pressure speculative trades such as Bitcoin.
Target rate probabilities for the December Fed meeting. Source: CME
Nonetheless, Bitcoin has avoided deeper declines despite the recent hot CPI prints.
For instance, BTC price rallied by over 15% after the March CPI report showed headline inflation rising to 3.3% from 2.4% in February.
One reason is that institutional buyers absorbed more than 500% of the newly mined Bitcoin supply, with Strategy accounting for a large share of that buying.
BTC/USD daily chart vs. institutional buying market cap. Source: Capriole Investments
That support looks weaker now. Strategy has paused its BTC purchases, while its STRC preferred stock continues to trade below its $100 par value.
When STRC trades below par, issuing new shares becomes less efficient, limiting Strategy’s ability to raise fresh capital for more Bitcoin buys.
Strategy’s weekly Bitcoin buying estimates. Source: STRC.LIVE
That weakening support may leave Bitcoin more exposed to a different CPI reaction pattern this time.
In a Sunday post, analyst Killa said larger players may start de-risking around the inflation release, pointing to a similar pattern of caution around CPI events in 2025.
BTC/USD performance after CPI releases. Source: TradingView/Killa
“Key level to hold is the 78.6K weekly open, if lost, 74–75K is the next downside target,” he said, adding:
“I would watch for liquidity sweeps around this pivot to signal the next move.”
BTC wedge hints at deeper decline toward $70,000
From a technical standpoint, Bitcoin is printing a classic rising wedge pattern on its daily charts.
A rising wedge is considered a bearish reversal setup that typically resolves when the price breaks below its lower trend line and falls by as much as the structure’s maximum height.
BTC/USD daily chart. Source: TradingView
As of Sunday, BTC was rising toward the wedge’s apex point, where its two trendlines converge, at around $84,000. A breakdown from that level may result in a decline toward the wedge’s measured downside target near $70,000.
Related: Bitcoin profit-taking may ‘accelerate’ as price hits 3-month high: Analyst
Conversely, a break above the apex point, which also coincides with the 200-day exponential moving average (200-day EMA, the blue line), may invalidate the bearish setup altogether.
In that scenario, the next potential upside target sits in the $90,000–$95,000 range.