Key Points
- BTC is up by less than 1% and is trading above $87,000.
- The market is gearing up for the release of CPI data in a few hours.
Bitcoin Transactions Surpass $87,000
The cryptocurrency market has been tumultuous this week, with most coins and tokens currently trading in the red. Bitcoin is priced at $87,000 after losing the crucial psychological threshold of $90,000 earlier this week. This downward trend comes ahead of the upcoming release of inflation data in the United States.
The U.S. inflation data for November is expected to show a 3.1% increase in the Consumer Price Index (CPI), which could have implications for the Federal Reserve’s interest rate decisions. Investors have been eagerly anticipating this data, especially after the absence of the October CPI due to a government shutdown, making this release particularly significant.
Some analysts remain cautiously optimistic about a potential short-term relief for Bitcoin. Nick Forster, founder of the onchain options platform Derive.xyz, commented:
The positioning of BTC remains decidedly bearish. The 30-day BTC volatility has risen to around 45%, while the skew sits at approximately -5%. The longer-term asymmetry is also anchored around -5%, indicating that traders are assessing ongoing downside risks into Q1 and Q2 as persistent selling pressure from previously inactive wallets weighs on spot prices.
Forster added that Bitcoin has a 30% probability of reaching $100,000, while the likelihood of regaining all-time highs remains around 10%.
Potential for a Deeper Bitcoin Correction
The BTC/USD four-hour chart currently indicates bearish momentum, reflecting Bitcoin’s underperformance in recent days. This decline follows a rejection by a descending trendline on Friday, leading to a 7% drop from its previous highs.
The leading cryptocurrency retested the support level at $85,000 on Wednesday but was able to rebound, trading above $87,000 per coin. However, if the downtrend continues and Bitcoin closes a daily candle below the $85,569 support level, it could extend its decline toward the psychological threshold of $80,000.
The Relative Strength Index (RSI) on the daily chart is at 41, below its neutral level of 50, indicating a strengthening bearish momentum. Additionally, the Moving Average Convergence Divergence (MACD) lines are also within the bearish region.
Conversely, if Bitcoin manages to recover and closes above the $85,569 mark, it could extend its rally toward the resistance level at $94,253.
